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
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