CHOLAHLDNG - Investment Analysis

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

Investment Rating: 4.2

📊 Fundamental Analysis

Cholamandalam Financial Holdings (CHOLAHLDNG) stands out as a strong long-term investment candidate, particularly for growth-focused investors. Here's how the key metrics shape up

Metric Value Implication

Market Cap ₹35,913 Cr Large-cap; stable and well-established

Stock P/E 16.5 Undervalued compared to industry PE of 26.1

PEG Ratio 0.58 Excellent; growth at a discount

ROE / ROCE 19.1% / 10.6% Strong profitability and capital efficiency

Dividend Yield 0.07% Very low; not ideal for income investors

Debt-to-Equity 13.9 High, but typical for NBFCs; manageable if asset quality holds

EPS ₹116 Robust earnings base

Qtr Profit Var +19.6% Consistent growth momentum

FII/DII Holding Change +0.64% / -0.37% FII interest rising; DII slightly trimming

📉 Technical Analysis

Current Price: ₹1,912

DMA 50 / DMA 200: ₹1,997 / ₹1,766 → Trading below 50 DMA; short-term weakness

RSI: 35.7 → Near oversold zone; potential for rebound

MACD: -11.8 → Bearish momentum

Volume: Above average; accumulation likely despite dip

💰 Ideal Entry Price Zone

Given the strong fundamentals and attractive valuation

Ideal Entry Zone: ₹1,800–₹1,850

This range offers a good margin of safety and aligns with technical support

Avoid fresh entry above ₹2,000 unless momentum and earnings growth accelerate.

📈 Long-Term Investment Outlook

Why it’s a good candidate

Strong ROE and consistent profit growth

PEG < 1 indicates undervaluation relative to growth

FII accumulation signals institutional confidence

Well-managed NBFC with diversified financial services exposure

Risks to monitor

High leverage (Debt-to-Equity 13.9) — typical for NBFCs but needs asset quality vigilance

Low dividend yield — not suitable for income-focused portfolios

Short-term technical weakness — may offer better entry points

🏁 Exit Strategy / Holding Period

If you already hold this stock

Holding Period: 3–5 years to benefit from compounding growth

Exit Strategy

Consider partial profit booking near ₹2,250–₹2,300 (recent high) if valuation stretches

Hold as long as ROE stays above 17% and PEG remains below 1

Reassess if debt levels rise unsustainably or earnings growth slows

Would you like a breakdown of its subsidiaries or a comparison with other NBFCs like Bajaj Finserv or Muthoot Finance?

Edit in a page