Buy Cholamandalam Investment & Finance Company, target price Rs 845: Axis Securities

Axis Securities has buy call on Cholamandalam Investment & Finance Company with a target price of Rs 845. The current market price of Cholamandalam Investment & Finance Company is Rs 715.3.

Cholamandalam Investment & Finance Company, incorporated in the year 1978, is a Large Cap company (having a market cap of Rs 58774.00 Crore) operating in NBFC sector.

Cholamandalam Investment & Finance Company key Products/Revenue Segments include Interest, Fees & Commission Income, Sale of services and Income From Sale Of Share & Securities for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 3067.02 Crore, up 9.70 % from last quarter Total Income of Rs 2795.91 Crore and up 22.84 % from last year same quarter Total Income of Rs 2496.71 Crore. Company has reported net profit after tax of Rs 566.28 Crore in latest quarter.

The company’s top management includes Mr.Vellayan Subbiah, Mr.Ravindra Kumar Kundu, Mr.M A M Arunachalam, Mr.Ashok Kumar Barat, Mr.N Ramesh Rajan, Mr.Rohan Verma, Ms.Bhama Krishnamurthy, Mr.Anand Kumar, Mr.Bharath Vasudevan. Company has S R Batliboi & Associates LLP as its auditors. As on 30-06-2022, the company has a total of 82 Crore shares outstanding.

Investment Rationale
The company is witnessing increasing disbursements which would help grow its AUM moving forward. The management commented in the Q2FY23 result conference call that the company is outpacing the industry growth rates on account of value growth in terms of inflation and cost of the vehicle as well as growth in the market share. This has been an encouraging sign. CIFC with its conservative management, comfortable liquidity position, and diversified portfolio mix is well-placed to ride on the expected demand recovery.

Promoter/FII Holdings
Promoters held 51.52 per cent stake in the company as of 30-Jun-2022, while FIIs owned 20.22 per cent, DIIs 20.15 per cent.