Cholamandalam Investment and Finance Company’s share price surged to 9.4 per cent in Thursday’s trade to hit its 52-week high of Rs 970.20 on BSE. This is after it reported a 24% rise in standalone profit for the quarter ended March 31 at Rs 852.8 crore.
The firm had registered a profit of Rs 689.6 crore during the corresponding quarter of the previous year.
The standalone total income for the quarter under review rose 44.17 per cent YoY to Rs 3,794.26 crore from Rs 2,631.75 crore registered in the same quarter of last year.
The company said the disbursements during the March quarter grew by 65 per cent YoY to Rs 21,020 crore while for the financial year 2022-23 (Fy23), it grew 87 per cent YoY to Rs 66,532 crore.
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Akshay Ashok, a research analyst at the brokerage firm Prabhudas Lilladher pointed out that at first look, Cholamandalam Investment’s result was very good as AUM growth beat the brokerage’s lofty expectations which is a positive.
He has a ‘hold’ rating on the stock with a target price of ₹820.
Ashok further said that the strong traction seen in new business is also a strong positive. He said the stock is richly valued at 4.7 times FY24 P/ABV.
JP Morgan maintained an overweight rating on Cholamandalam Investment with a target price of Rs 1,020. “The company recorded a margin improvement while maintaining system-leading growth which addresses our primary concern,” it said.
“All the growth vectors are firing. The asset quality remains solid, and the premium valuations can sustain in the near term,” it added.
Motilal Oswal has a positive outlook on Cholamandalam Investment and Finance with a buy rating.
“The vulnerable asset pool (Stage 2 + 3) declined 170bp QoQ to 6.7%. The improvement in the 30+dpd pool suggests that organic collections without any extraordinary write-offs contributed to this improvement. The key things to watch out for will be the demand outlook for both new and used vehicles, its evolving strategy in new product segments in the SME and Consumer ecosystem, and the margin trajectory,” it said.
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