Shares of Cholamandalam Investment & Finance Company (Chola Finance) surged by nearly 4% on September 4, 2024, after Goldman Sachs initiated coverage with a “Buy” rating. The investment bank set a price target of ₹1,786 for Chola Finance, suggesting a 20% potential upside from the stock’s closing price of ₹1,487.
Goldman Sachs highlighted Chola Finance’s market share gains in the commercial retail sector, driven by an upswing in the industry. The firm noted that Chola’s strategy to diversify into non-vehicle finance businesses is expected to reduce earnings cyclicality and enhance growth visibility.
Goldman Sachs projects a 33% compound annual growth rate (CAGR) for Chola’s earnings per share (EPS) from FY24 to FY27, along with an improving return on assets (ROA). The firm attributes this growth to Chola’s ability to diversify its loan portfolio, its secured loan base, and operational leverage in new business segments.
As of 9:48 AM, Chola Finance shares were trading 3.41% higher at ₹1,538.00 on the NSE.