The IIFL Securities Report: Buy Cholamandalam In & Fin Co - February 25

IIFL Securities recommends a buy call on Cholamandalam Investment and Finance Company at the current market price of Rs 1397.95, with a target price of Rs 1440. The company's strong asset quality, diversified loan book, and healthy balance sheet are key reasons for the positive outlook. Cholamandalam In & Fin's prudent risk management and cost control measures are expected to drive its financial performance in the upcoming quarters.

About Cholamandalam In & Fin Co:

Cholamandalam Investment and Finance Company Limited (CIFCL) is a non-banking finance company (NBFC) based in India. It offers a range of financial products and services, including vehicle financing, home loans, business loans, and investment advisory services. CIFCL has a wide network of branches across India and also provides its services through online channels. The company is a subsidiary of Murugappa Group, one of India's leading business conglomerates. CIFCL is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

52 Week Price Trend:

Cholamandalam Investment and Finance Company Limited (Cholamandalam) is trading at Rs 1397.95, exhibiting a positive growth trajectory. Over the past year, the stock has witnessed a significant rise, reaching a 52-week high of Rs 1652. However, it has also faced volatility, with the 52-week low being Rs 1011.2. Despite the recent decline from its highs, Cholamandalam remains well above its 52-week low, indicating strong investor confidence in the company.

Stratzy's MOST Analysis:

CHOLAFIN has received an AAA rating from Stratzy's MOST Framework, indicating a low fundamental risk. This assessment is based on the company's strong management team, positive outlook, sound safety practices, and favorable trend analysis. The AAA rating suggests that CHOLAFIN has a solid financial foundation, operates with integrity, and is well-positioned for future growth, making it an attractive investment option for risk-averse investors seeking stability and long-term potential.

Company's Fundamentals:

Cholamandalam Investment and Finance Company (NSE: CHOLAFIN) exhibits a valuation multiple of 28.61 in terms of its price-to-earnings (PE) ratio, indicating that investors are willing to pay a premium of 28.61 times the company's annual earnings. Its price-to-book (PB) ratio of 5.44 suggests that its current market capitalization is 5.44 times higher than its book value, implying a premium valuation. Despite these valuations, Cholamandalam offers a modest dividend yield of 0.14%, indicating that the company prefers to retain earnings for growth and expansion rather than distributing dividends to shareholders.

Fundamental and Technical information provided in this blog were last updated on 25 Feb, 2025

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