Cholamandalam Investment Q4 Results Review - Growth Outlook Robust; NIM Trajectory Positive: Nirmal Bang

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.Cholamandalam Investment and Finance Company Ltd.’s Q4 FY24 net interest income/pre-provision operating profit deviated by -3.1%/-2.9% from our estimates. Profit after tax was higher by 8% on account of lower provisions. Cholamandalam reported strong assets under management growth of 37% YoY to Rs 1,456 billion led by robust growth in new business verticals. We expect FY25 growth to be driven by ssed/ passenger vehicles and new business verticals (consumer and small enterprise loan, secured business and personal loan and small and medium enterprise).Reported net interest margin improved to 7.8%, led by a re-pricing and growth in used vehicles. We expect NIMs to improve in FY25 benefited by a lower cost of fund; expect opex to be elevated as the company is in an expansion phase. Credit cost stood at ~1.0% in FY24 and we expect it to remain in the range of 0.8%-1% in FY25E/ 26E.We expect assets under management growth of 25.3%/ 23.5% in FY25/ FY26E with an return on asset of 3.1% in FY26E. We value Cholamandalam keeping an unchanged multiple of 4.2 times March-26 adjusted book value to arrive at our target price of Rs 1,400. Maintain Accumulate as valuation is already at a premium and prices in all the positives..Click on the attachment to read the full report:.Cholamandalam Investment Q4 Results: Profit Rises 25% To Rs 1,065 Crore.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Cholamandalam Investment Q4 Results Review - Growth Outlook Robust; NIM Trajectory Positive: Nirmal Bang

AuM growth robust driven by new business verticals

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