CHOLAFIN - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Fundamental Analysis: Cholamandalam Investment and Finance Co. Ltd (CHOLAFIN) Fundamental Rating: 4.3

📈 Core Financials Overview

Profit Growth

PAT up from ₹1,088 Cr to ₹1,260 Cr ➜ Qtr growth of 18.2%

Earnings Strength

EPS: ₹50.7, supported by sustained profitability

Return Metrics

ROE: 19.7% ➜ robust capital efficiency

ROCE: 10.3% ➜ acceptable but lower than peers

Leverage

Debt-to-equity: 7.4 ➜ aggressive, but typical for NBFCs aiming high growth

Dividend

Yield of 0.13% ➜ focus remains on reinvestment over payouts

💸 Valuation Check

Indicator Value Comment

P/E Ratio 29.3 Above industry avg (25.2)—growth priced in

P/B Ratio ~5.28 (1,485 ₹ / 281 ₹) ➜ premium valuation

PEG Ratio 1.15 Fairly priced growth; not undervalued

📉 Conclusion: Slightly overvalued based on traditional metrics, with growth expectations already baked into price.

🏢 Business Model & Competitive Advantage

Premier NBFC with strong digital and pan-India vehicle finance network

Expanding focus on home equity and SME lending

Low NPAs and consistent profit growth offer stability in scale

Institutional Activity

FII Hold ↓ 0.27% ➜ mild foreign de-risking

DII Hold ↑ 0.56% ➜ domestic confidence intact

📉 Technical Signals

RSI: 35.8 ➜ approaching oversold levels

MACD: -16.5 ➜ downward trend likely to soften soon

Price near 200 DMA (₹1,465) ➜ possible support zone

✅ Suggested Entry Zone: ₹1,420–₹1,470 🛒 Look for stabilization and volume confirmation around 200 DMA before entering.

⏳ Long-Term Holding View

Strong brand, efficient underwriting, and digitized onboarding

Potential tailwind from rising vehicle sales and Tier-2 credit demand

Ideal for investors seeking

Exposure to growing consumer lending

High ROE and predictable performance

A balance of scale and agility in financial services

📌 If growth sustains and macro headwinds ease, CHOLAFIN could be a reliable compounder—though future gains may be steadier than explosive.

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