Buy Cholamandalam Inv and Fin Co; target of Rs 1605: KR Choksey

KR Choksey's research report on Cholamandalam Inv and Fin Co

Net Interest Income (NII) for Q1FY25 stood at INR 25,738 Mn, a growth of 39.7% YoY (+9.3% QoQ), led by strong business momentum. NII was 2.3% higher than our estimates. Pre-Provision Operating Profit was at INR 18,499 Mn, an increase of 42.6% YoY/ 4.1% QoQ. PPOP was above our estimates led by lower-than expected operating expenses. Profit after Tax (PAT) for Q1FY25 was INR 9,422 Mn, reporting a growth of 29.8% YoY (-11.0% QoQ). Net profit was 1.9% higher than our estimates.

Outlook

We assign a P/ABV multiple of 6.3x (earlier 5.8x) to the FY26E adj. BVPS of INR 254.6 to arrive at a target price of INR 1,605/share (earlier INR 1,455), implying an upside of 20.2%. Accordingly, we reiterate our rating at “BUY” considering the growing optimism in the sustaining a healthy business momentum and profitability.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Cholamandalam - 080824 - kr