Buy Cholamandalam In & Fin Co: IIFL Securities's Target Price Rs 1510

IIFL Securities initiated coverage on Cholamandalam Investment and Finance Company (Cholamandalam In & Fin Co) with a 'buy' call. The brokerage has set a target price of Rs 1510 for the stock, implying an upside of nearly 3% from the current market price of Rs 1466.15. IIFL Securities believes that Cholamandalam In & Fin Co's strong franchise in the vehicle finance segment, along with its diversified loan portfolio, will drive growth going forward.

About Cholamandalam In & Fin Co:

Cholamandalam Investment and Finance Company (CIFCL) is a non-banking financial company (NBFC) based in Chennai, India. It is a part of the Murugappa Group and was established in 1978. CIFCL offers a range of financial services, including vehicle finance, home loans, business loans, investment advisory services, and insurance broking. The company has a presence in over 1,000 locations across India and has a customer base of over 10 million.

52 Week Price Trend:

Cholamandalam Investment and Finance Company (CHOLAFIN) is currently trading at Rs 1466.15, significantly higher than its 52-week low of Rs 709.85 but still below its 52-week high of Rs 1310. The stock has experienced significant volatility in the past year, with a wide range between its highs and lows. Its current price suggests a moderate recovery from the lows but indicates potential for further growth given the company's strong fundamentals and prospects in the financial services sector.

Stratzy's MOST Analysis:

Stratzy's MOST framework assigns a AAA rating to CHOLAFIN, signifying that the company poses a low fundamental risk. This comprehensive evaluation considers four key pillars: Management, Outlook, Safety, and Trend. Each of these pillars is meticulously assessed, and the overall rating of AAA indicates that CHOLAFIN exhibits exceptional management practices, a positive outlook, robust safety measures, and a favorable trend.

Company's Fundamentals:

Cholamandalam Investment and Finance Company (NSE: CHOLAFIN) is currently valued at a price-to-earnings (PE) ratio of 29.06, indicating that investors are willing to pay 29.06 times the company's annual earnings per share for its stock. Its price-to-book (PB) ratio of 5.9 suggests that the stock is priced at 5.9 times the company's book value per share, indicating a premium valuation compared to its accounting value. Despite its relatively high PE and PB ratios, CHOLAFIN offers a low dividend yield of only 0.18%, which may not be attractive for income-oriented investors seeking dividend income.

Fundamental and Technical information provided in this blog were last updated on 27 Jul, 2024

Disclaimer: The information and recommendations presented in this section, including any attached reports, are sourced from third-party providers through diverse channels. The views and opinions expressed within these materials belong solely to their respective creators. These views and opinions do not necessarily reflect the position of Stratzy Fintech Pvt Ltd. Stratzy explicitly disclaims any guarantees, express or implied, regarding the accuracy and reliability of the provided content. We strongly advise consulting with a licensed financial advisor before making any investment decisions based on this information. Remember, seeking independent financial advice is crucial.