IIFL Securities Stock Market Watch Today: Buy Cholamandalam In & Fin Co - June 03

On June 03, IIFL Securities initiated a buy call on Cholamandalam Investment and Finance Company (Cholamandalam In & Fin Co) with a target price of Rs 1409, indicating an upside potential of approximately 10% from its current market price of Rs 1280. The brokerage firm is positive on the stock due to the company's strong fundamentals, including its diversified portfolio, healthy growth prospects, and sound asset quality. Cholamandalam In & Fin Co is expected to benefit from the ongoing recovery in the economy, particularly in the commercial vehicle segment.

About Cholamandalam In & Fin Co:

Cholamandalam Investment and Finance Company (Chola) is a non-banking financial company (NBFC) based in Chennai, India. It is a part of the Murugappa Group and offers a range of financial services including vehicle finance, home loans, business loans, and investment advisory services. Chola has a strong presence in the rural and semi-urban markets of India and is known for its innovative financial products and customer-centric approach. It is a publicly listed company on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

52 Week Price Trend:

Cholamandalam Investment and Finance Company Limited (CHOLAFIN) trades at Rs 1280, hovering near its 52-week high of Rs 1310. The stock has witnessed a remarkable surge of over 80% from its 52-week low of Rs 709.85. This growth underscores CHOLAFIN's robust financial performance, fueled by its strong presence in vehicle financing, home loans, and other financial services. Analysts anticipate continued growth for CHOLAFIN, citing its solid asset quality, prudent risk management, and increasing market share.

Stratzy's MOST Analysis:

Based on Stratzy's MOST framework, CHOLAFIN has received an AAA rating, indicating low fundamental risks. The framework evaluates stocks based on Management, Outlook, Safety, and Trend. A high rating in each category signifies strong management, positive industry outlook, financial stability, and favorable market trends. CHOLAFIN's overall AAA rating demonstrates its sound management practices, optimistic industry prospects, strong financial health, and bullish market trajectory, making it a low-risk investment with solid fundamentals.

Company's Fundamentals:

Cholamandalam In & Fin Co (CHOLAFIN) trades at a P/E ratio of 29.06, indicating that investors are willing to pay ₹29.06 for every ₹1 of earnings. Its Price-to-Book (PB) ratio of 5.9 implies that the market value of its assets is 5.9 times its book value. CHOLAFIN's dividend yield of 0.18% suggests it pays out a small portion of its earnings as dividends, indicating a focus on reinvesting profits for growth. These metrics provide insights into CHOLAFIN's valuation, profitability, and cash distribution policies.

Fundamental and Technical information provided in this blog were last updated on 01 Jun, 2024

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