Jefferies has upgraded its target price for Chola Investment and Finance Company Limited (Chola Invest) to ₹1,800 per share, signaling an 18.03% potential upside from the stock’s September 11 closing price of ₹1,525. The revised target reflects confidence in Chola Invest’s robust loan growth and favorable conditions for net interest margins (NIMs).
The brokerage anticipates Chola Invest’s loan growth to maintain a strong 27% rate in FY25, despite softer trends in select auto segments. The company is expected to benefit from its high proportion of borrowings linked to T-Bills, which should result in more immediate gains from easing interest rates compared to its peers. Operational leverage is anticipated to boost new business return on assets (RoA) by 100 basis points, lifting the group RoA by 22 basis points.
Jefferies projects an impressive 29% compound annual growth rate (CAGR) in EPS for FY24-27, underlining the company’s strong growth prospects.
