Cholamandalam Investment & Finance Company
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Cholamandalam Investment and Finance Company (Chola) is positioned for robust growth, driven by management's optimistic outlook and strategic focus on expanding its non-vehicle finance segments, particularly in Loan Against Property and gold loans. The company has achieved its FY27 credit cost target ahead of schedule, indicating structural improvements in credit management. With a projected AUM growth of 20-23%, Chola is capitalizing on favorable industry trends, including increased infrastructure spending and rural demand. However, potential risks from external factors such as geopolitical tensions and inflationary pressures could impact credit costs and asset quality. Vista's financial outlook reflects a fair valuation aligned with intrinsic value, supported by improving margins and a strong balance sheet. The expected upside of nearly 28% underscores the market's constructive sentiment towards Chola's growth trajectory. Over the next 12-24 months, key opportunities include the expansion of the gold loan segment and enhanced operational efficiency, while watchpoints include asset quality management and potential cost pressures from rising interest rates
Why We Like This Stock
- Management's achievement of early credit cost targets indicates strong operational control and risk management
- Projected AUM growth of 20-23% reflects robust demand across multiple lending segments
- Strategic expansion into gold loans and non-vehicle finance segments enhances market presence and profitability
Things To Watch Out For
- Potential geopolitical tensions and inflationary pressures could adversely affect credit costs and asset quality
- Deterioration in asset quality metrics, including an increase in Stage 3 assets, raises concerns about future performance
- Rising repo rates may limit net interest margin expansion and increase the cost of funds
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 9,932 | 13,395 | 16,689 | 17,950 | 22,076 |
| Profit Before Tax (Cr.) | 4,606 | 5,743 | 6,977 | 9,435 | 11,633 |
| PBT Margin | 46.4% | 42.9% | 4180.6% | 52.6% | 52.7% |
| Net Profit (Cr.) | 3,381 | 4,019 | 4,963 | 6,711 | 8,275 |
| Earnings Per Share | 39.6 | 47.1 | 58.2 | 78.7 | 97.0 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| CLSA | ▲ Outperform | 1,970 | 29-Jul-2026 |
| Citigroup | ▲ Buy | 2,100 | 29-Jul-2026 |
| Deven Choksey | ► Accumulate | 2,003 | 30-Jul-2026 |
| Emkay Global | ► Hold | 1,800 | 05-May-2026 |
| HDFC Securities | ► Add | 1,810 | 05-May-2026 |
| HSBC | ▲ Buy | 2,140 | 29-Jul-2026 |
| ICICI Securities | ► Hold | 1,785 | 04-May-2026 |
| IDBI Capital | ▲ Buy | 1,811 | 04-May-2026 |
| JPMorgan | ▲ Overweight | 2,075 | 29-Jul-2026 |
| Jeffries | ▲ Buy | 2,100 | 29-Jul-2026 |
| Kotak Securities | ▲ Buy | 1,600 | 03-Apr-2026 |
| Macguire | ▼ Underperform | 1,495 | 29-Jul-2026 |
| Moneycontrol | ▲ Overweight | nan | 05-May-2026 |
| Morgan Stanley | ► Equalweight | 1,900 | 29-Jul-2026 |
| Motilal Oswal | ▲ Buy | 2,140 | 29-Jul-2026 |
| Nomura | ► Hold | 1,760 | 05-May-2026 |
| Prabhudas Liladhar | ► Accumulate | 1,950 | 29-Jul-2026 |
| UBS | ▲ Buy | 2,100 | 29-Jul-2026 |
Company Overview
Show Company Profile
Cholamandalam Investment and Finance Company Limited, operates as a non-banking finance company in India. The company operates through Vehicle Finance, Loan Against Property, Home Loans, and Other Loans segments. It offers loans for commercial vehicles, passenger vehicle, two- and three- wheelers, and tractors and farm equipment, as well as construction equipment. The company also provides secured loans against property, and home and SME loans, as well as consumer and small enterprise loans, including personal loans, professional loans, and business loans to salaried, self-employed professionals, and proprietorship, partnership, and private limited companies. In addition, it offers gold loans, consumer durable loans, corporate insurance agencies, stockbroking and depository participants, offline payment aggregator, home extension, balance transfer of existing loans, supply chain finance, and secured term loans. Further, the company provides dealer platform services under the Gaadi Bazaar brand, which integrates vehicle trading, auctions, and trade advances. Additionally, it operates Payswiff, an omnichannel payment transaction solution that lets business owners accept payments from their customers in-store, at-home deliveries, online and on-the-go using mPOS, and POS solutions. The company was incorporated in 1978 and is based in Chennai, India.