Sharekhan has given Buy recommendation for Cholamandalam Investment and Finance Company with a target price of Rs. 720 in its research report issued on Mar 07, 2022

Sharekhan’s research report on Cholamandalam Investment and Finance Company

We believe that Cholamandalam Investment Finance Company (CIFC) is a strong vehicle finance player and outdoes its peers in terms of loan book growth; non-auto segments are likely to drive growth going ahead, even as outlook for auto loans improves. New businesses would aid growth momentum as well though near-term challenges on the supply front may hit growth. The company has demonstrated stable asset quality through cycles and we expect it to improve further given CIFC’s ability to tide over credit cycles with relative ease and its lower credit cost versus peers. Stock has corrected by 14% from the highs of Rs. 702 as compared to 14% and 20% correction in the NIFTY and NIFTY Bank indices respectively. Such correction in the stock price offers a good buying opportunity for investment with risk and reward ratio turning favorable. Additionally, it has given returns of 8% in the past three months and outperformed its peers.

Outlook

The stock is available at 5x/4.1x its FY2023E/FY2024E BVPS. We re-iterate our Buy rating with price target (PT) of Rs. 720.

More Info

At 16:01 hrs Cholamandalam Investment and Finance Company was quoting at Rs 616.00, up Rs 9.45, or 1.56 percent.

It has touched an intraday high of Rs 621.20 and an intraday low of Rs 596.00.

It was trading with volumes of 79,975 shares, compared to its thirty day average of 109,632 shares, a decrease of -27.05 percent.

In the previous trading session, the share closed down 8.17 percent or Rs 53.95 at Rs 606.55.

The share touched its 52-week high Rs 701.75 and 52-week low Rs 469.75 on 22 February, 2022 and 20 December, 2021, respectively.

Currently, it is trading 12.22 percent below its 52-week high and 31.13 percent above its 52-week low.

Market capitalisation stands at Rs 50,572.45 crore.

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