Cholamandalam Investment shares jump 10% post-Q4 results; brokerages mixed

Cholamandalam Investment share price, Cholamandalam Investment Q4 result, Cholamandalam Investment dividend: Shares of Cholamandalam Investment and Finance Company surged over five per cent on Thursday, May 2 after the company reported a 24.5 per cent rise in net profit to Rs 1,065 crore for the March quarter on account of an increase in the core business. The stock rose as much as nearly 10 per cent to the day's high of Rs 1,309.8 on NSE in opening deals. The counter closed at Rs 1,301.85, up 9.1 per cent on NSE.

The Murugappa Group firm had earned a consolidated profit of Rs 855 crore during the corresponding quarter of the previous year. During the quarter, the company's total income increased to Rs 5,499 crore as against Rs 3,835 crore a year ago, Cholamandalam Investment and Finance Company said in a regulatory filing.

Interest income grew to Rs 4,938 crore during the period under review from Rs 3,499 crore in the year-ago period.

Total expense rose to Rs 4,071 crore compared to Rs 2,672 crore in the fourth quarter of FY23. Read more on Cholamandalam Investment Q4 results

Cholamandalam Investment share price target: What should investors do?

Jefferies has maintained a 'buy' call on the Cholamandalam Investment and Finance stock with a target of Rs 1,400, an upside of 17.3 per cent from the previous close. Here are key points that Jefferies noted:

• CIFC's PAT was Rs 10.6 billion (+24 per cent Year-on-Year), 15 per cent beat vs. estimates due to higher fee income and lower provision.
• AUM grew 37 per cent YoY ahead of our 34 per cent estimates (auto 26 per cent YoY).
• NIM was steady Quarter-on-Quarter (QoQ).
• GNPA fell 33bps QoQ to 2.5 per cent

CLSA and Nomura have each maintained a 'reduce' rating on Cholamandalam Investment shares with a target of Rs 1,300 and Rs 1,000, respectively. According to CLSA, the Q4 Pre-Provision Operating Profit (PPOP) was broadly in line while PAT beat estimates

"While AUM growth is strong at 37 per cent YoY, there is a deceleration in disbursement growth across segments, especially vehicle finance. Expect AUM CAGR to moderate to 22 per cent in FY25/26," the brokerage added. 

Meanwhile, Nomura in its note, highlighted the following key points: 

• Strong quarter driven by lower credit costs
• Improvement in asset quality and lower ECL/EAD drive credit cost moderation
• Margins expand driven by a rise in yields and stable CoF
• Rich value leaves no margin of safety

In addition, Morgan Stanley has maintained an 'equal-weight' rating on Cholamandalam Investment with a target of Rs 1,250.

Cholamandalam Investment dividend

The board has recommended a final dividend of 70 paise per share or the year ended March 2024.

(with agency inputs)

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