Cholamandalam - Loan Growth Moderation To Test Sector Leadership: HDFC Securities

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..HDFC Securities Report.Cholamandalam Investment and Finance Company Ltd. portfolio diversification beyond vehicle finance has yielded results with the share of vehicle finance at ~58% as of March 2024 (FY18: 73%), which is poised to fall further to ~50% over the next three years.With the new engines gradually approaching their maturity curves, we expect Cholamandalam to sustain its profitability at current levels. With increased investments (increased branch penetration of these products, scale-up of channel partners, tie-ups with corporates, etc.), we expect strong efficiency gains to kick in over the next couple of years, offsetting the uptick in credit costs, given the likely normalisation of the benign credit environment.Cholamandalam has emerged as a highquality franchise, offering a potent combination of high growth and strong and consistent profitability, driving premium valuations to Bajaj Finance Ltd.However, loan growth is likely to moderate on the back of a softening personal vehicle and commercial vehicle cycle, despite higher growth in the new businesses. We maintain 'Add' with a revised RIbased target price of Rs 1,500 (implied 4.6 times March 2026 adjusted book value per share)..Click on the attachment to read the full report:.NPCI Extends 'UPI One World' Wallet To All Inbound International Travellers.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 - Loan Growth Moderation To Test Sector Leadership: HDFC Securities

The premium valuation and moderation in loan growth render limited upside for Cholamandalam, says the brokerage.

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