Emkay Global has a call to buy on Cholamandalam Investment & Finance Company with a target price of Rs 835. The current market price of Cholamandalam Investment & Finance Company is Rs 746.1. The period given by the analyst is one year when the price of & Finance Company Ltd. can achieve the set goal.

Cholamandalam Investment & Finance Company Ltd., incorporated in 1978, is a large capitalization company (having a market capitalization of Rs 61345.28 Crore) operating in the NBFC sector.

Cholamandalam Investment & Finance Company Ltd. Major revenue/income segments include interest, fee and commission income, sale of services and income from the sale of stocks and securities for the year ending March 31, 2022.

Finance

For the quarter ended 30-06-2022, the company reported consolidated total revenue of Rs 2795.91 Crore, up 5.24% from last quarter, total revenue of Rs 2656.63 Crore and in up 12.65% from the same quarter last year, total revenue of Rs 2481.91 Crore. The company reported a net profit after tax of Rs 567.28 Crore last quarter.

Investment rationale
The brokerage postpones the forecast to September 23rd and retains the buy rating with a September 23rd TP of Rs 835 (previously Rs735), using the excess return on equity (ERE) method, for FY23E-24E RoE d ‘about 19.3%, implying a multiple of 3.8x Sep’24E BVPS. Key downside risks include higher-than-estimated operating expense ratios for the forecast period.


Promoter/Fii Holdings
The promoters held 51.52% of the company’s capital as of June 30, 2022, while the FIIs held 20.22% and the DIIs 20.15%.

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