Sharekhan has given Buy on the stock with a recommendation for Cholamandalam Investment and Finance Company with a target price of Rs. ekhan is bullish on Cholamandalam Investment and Finance Company has recommended buy on the stock with a revised price target (PT) of Rs. 720 in its research report issued on Feb 02, 2022
The stock is available at 3.9x/3.2x its FY2023E/FY2024E ABVPS. The premium valuation as compared to its peers is due to its high earnings growth prospects with better management of the pandemic situation. The company has witnessed sharp recovery in disbursements and collections during the quarter, which we believe would improve further going ahead. Assets under management (AUM) growth is likely to be in single digits in FY2022E, followed by pickup up FY2023-FY2024E and can see double-digit growth. CIFC, parentage of the Murugappa Group, is well diversified across product segments – vehicle finance, small business finance, and housing finance, which will enable it to deliver in terms of growth, risk, and return. We maintain our Buy rating with a revised price target (PT) of Rs. 720.