Jefferies has maintained a buy rating on Cholamandalam Investment and Finance Company (CIFC) with a target price of ₹1,980 per share, implying an upside of about 18% from the current market price of ₹1,678.40.
In its latest note, Jefferies addressed concerns raised by investigative journalism portal Cobrapost, which had flagged issues related to large cash deposits, related-party transactions and payouts to agencies. Jefferies said the company has categorically rejected these allegations and clarified that the issues highlighted appear to be in line with standard industry practices.
The brokerage pointed out that cash EMI payments are common for a section of CIFC’s borrower base, particularly among customers who earn predominantly in cash. As a result, Jefferies does not see large cash collections as unusual or structurally problematic for the business model.
On related-party transactions, Jefferies noted that the items flagged reflect normal business operations, are fully disclosed, and do not deviate from accepted norms. Other concerns raised in the report were also assessed as being broadly consistent with standard operating practices across the NBFC sector.
Jefferies added that, based on its analysis, the allegations lack substantive merit and do not alter its fundamental view on the company’s operating or governance framework. The brokerage continues to see Cholamandalam Investment as well positioned within its target segments.
Management has guided for healthy disbursement momentum in the third quarter, which Jefferies believes supports its positive outlook on growth and earnings visibility in the near term.
Disclaimer: This article is for informational purposes only. The views expressed are those of the brokerage and do not constitute investment advice or a recommendation to buy or sell the stock.
