AUM growth robust; No NIM expansion because of rise in CoB

30 Jan 2024
5 Min read 
  • Cholamandalam Inv. & Finance (CIFC) reported robust AUM growth and improved asset quality in newer businesses.
  •  The company's 3QFY24 PAT grew 28% YoY, while NII grew 36% YoY.
  •  CIFC has tightened underwriting standards in the CSEL Partnerships business to control delinquencies.
  •  The company expects NIM to improve in the near term and has levers on cost ratios and AUM growth to deliver healthy RoA/RoE.
  •  The stock has a buy rating with a revised TP of INR1,470 based on 4.0x FY26E BVPS.
  •  Key risks include higher delinquencies in new businesses and cyclicality in the vehicle finance business.
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