CHOLAFIN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.1

📈 Positive

• 📊 Strong profitability with ROE at 19.7% and quarterly PAT of ₹1,136 Cr.
• 📈 EPS of ₹53.0 supports solid earnings visibility and valuation strength.
• 📉 PEG ratio of 1.26 indicates reasonable valuation relative to growth.
• 📈 Trading above DMA50 and DMA200 (₹1,611 and ₹1,516), confirming bullish trend continuation.
• 📈 DII holding increased by 1.22%, reflecting growing domestic institutional confidence.

⚠️ Limitation

• 📉 High debt-to-equity ratio of 7.40 typical for NBFCs, but still a financial risk factor.
• 📉 ROCE at 10.3% is modest, suggesting room for improvement in capital efficiency.
• 📉 FII holding declined by 1.11%, indicating reduced foreign investor interest.
• 📉 Dividend yield of 0.12% offers minimal passive income.
• 📉 Volume below 1-week average may reflect short-term cooling in investor activity.

📰 Company Negative News

• 📉 Quarterly PAT declined from ₹1,267 Cr. to ₹1,136 Cr., a 10.3% drop QoQ.
• 📉 High leverage remains a structural risk in volatile interest rate environments.

🌟 Company Positive News

• 📈 Quarterly profit growth of 20.6% YoY signals strong operational momentum.
• 📈 MACD at 38.8 and RSI at 63.1 reflect bullish technical momentum.

🏦 Industry

• 🏦 CHOLAFIN operates in the NBFC sector, focusing on vehicle finance, home loans, and SME lending.
• 📊 Industry P/E of 22.6 suggests CHOLAFIN trades at a premium, justified by its growth and scale.

🧭 Conclusion

• 📌 Suggested entry zone: ₹1,600–₹1,650, near DMA50 for better risk-reward positioning.
• 🕰️ Long-term holding favorable due to strong earnings, brand strength, and diversified lending portfolio.
• ⚖️ Monitor debt levels and asset quality metrics to assess sustainability of growth.