Shares of Cholamandalam Investment and Finance rose over 3% in Wednesday’s session even as HSBC lowered its target price on the stock, citing a weaker outlook for the financial sector amid global uncertainties.
The stock gained 3.01% to Rs 1,395.50, up Rs 40.80 from its previous close of Rs 1,354.70. During the session, it traded in a range of Rs 1,392.80 to Rs 1,409.60, taking its market capitalization to approximately Rs 1.17 lakh crore. The company currently trades at a price-to-earnings ratio of 24.27 with a dividend yield of 0.14%.
HSBC maintained a ‘buy’ rating on the stock but reduced its target price to Rs 1,790 from Rs 1,970 earlier. The brokerage highlighted that the ongoing Middle East conflict could impact demand, growth, and margins across financial companies.
According to HSBC, early signs of pressure have emerged on the liability side, while asset-side stress could also develop across multiple segments going forward. The brokerage has cut its estimates for assets under management (AUM) growth, margins, and earnings per share (EPS) across the financial sector.
Despite the cautious outlook, the brokerage continues to prefer select non-banking financial companies, including Cholamandalam Investment, due to their relatively stronger positioning.
As of Wednesday’s session, the stock remained in focus with steady buying interest despite the target price cut.
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