Cholamandalam Investment and Finance | Business Upturn

Investec upgrades Cholamandalam Investment and Finance to Buy, expects 14% upside in stock price

Markets Desk — Mon, 23 Sep 2024 02:11:17 +0000

Investec has upgraded Cholamandalam Investment and Finance Company today (Chola Fin) to “buy,” increasing the target price to Rs 1850, which indicates a potential upside of 14% from the previous close of Rs 1611.

The brokerage praises Chola Fin’s strong execution in growth, asset quality, and profitability. It sees significant levers for continued growth, particularly in diversified segments, with non-vehicle finance expected to expand at over 30%. While vehicle sales are weakening, Investec believes this will not significantly impact overall growth.

The firm also anticipates that margin expansion and operating leverage will help sustain return on assets (RoA) at 2.6% and return on equity (RoE) at 20%, despite rising credit costs. However, it points out a concern regarding the company’s balance sheet management, highlighting lower provision coverage, a negative asset-liability management gap in short-duration buckets, and higher leverage compared to peers.

Jefferies increases target price for Chola Investment and Finance, expects stock to rally 18.03%

Markets Desk — Thu, 12 Sep 2024 02:14:55 +0000

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.

Cholamandalam Investment and Finance shares surge nearly 4% after Goldman Sachs initiates coverage with ‘buy’ rating

Aditya Bhagchandani — Thu, 05 Sep 2024 04:20:44 +0000

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.