Firstcall are 'overweight' on Cholamandalam Investment & Finance for medium to long term investment

Firstcall India Equity | April 4, 2016, midnight


-  Cholamandalam Investment and Finance Company Ltd (CIF CL) offer stock broking, mutual fund and investment advisory services through its subsidiaries.

-  During Q4 FY16, net profit jumps to Rs. 1938.20 mn against Rs. 1365.70 mn in the corresponding quarter ending of previous year, an increase of 41 .92%.

-  Net Sales for the 4th quarter of FY16 rose by 20.94% to Rs. 11412.40 mn from Rs. 9436.80 mn, when compared with the prior year period.

-  During Q4 FY16, EBITDA at Rs. 8373.70 mn as against Rs. 6986.30 mn in the corresponding period of the previous year.

-  Profit before tax (PBT) at Rs. 2987.10 mn in Q4 FY16 compared to Rs. 2046.50 mn in Q4 FY15, registered a growth of 45.96%.

-  The company has recommendation of final dividend 20 % i.e., Rs.2.00 /- per share on face value of Rs. 10.00/- each for the year ended March 31, 2016.

-  The company has invested Rs.80.00 mn in M/s.White Data Systems India Pvt Ltd for acquiring 63% stake in March 2016.

-  During Q4 FY16, the Company disbursed Rs. 37600.00 million, a growth of 46.65% in Vehicle Finance business as against Rs.25640 million in Q4 FY15.

-  The Company disbursement grew by 16% in Home Equity loans from Rs. 8570.00 million in Q4 FY15 to Rs. 9940.00 million in Q4 FY16.

-  The capital adequacy ratio (CAR) of the company was at 19.68% as against the regulatory requirement of 15%.

-  The company’s Net Income Margin (NIM) was 9.4% for the Mar quarter, compared to 8% in the same quarter of last year.

-  Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 19% over 2015 to 2018E respectively.


-  At the current market price of Rs.906.05, the stock P/E ratio is at 21.23 x FY17E and 18.90 x FY18E respectively.

-  Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 42.68 and Rs. 47.95 respectively.

-  Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 19% over 2015 to 2018E respectively.

-  On the basis of EV/EBITDA, the stock trades at 8.67 x for FY17E and 8.18 x for FY18E.

-  Price to Book Value of the stock is expected to be at 3.04 x and 2.59 x for FY17E and FY18E respectively.

-  Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

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