Buy Cholamandalam Inv; target of Rs 245: Motilal Oswal

Motilal Oswal is bullish on Cholamandalam Inv recommended buy rating on the stock with a target price of Rs 245 in its research report dated July 31, 2020.

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August 07, 2020 / 01:44 PM IST

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Motilal Oswal 's research report on Cholamandalam Inv

CIFC’s 1QFY21 reported PAT was up 37% YoY to INR4.3b (est.: INR1.6b); the beat was largely driven by much lower provisioning of INR562m (est.: INR3.5b). Additionally, opex declined 14% QoQ to INR3.9b (13% lower than est.), which led to a 12% beat in PPoP to INR6.3b. While the moratorium rate was largely stable at 76%, we note that 34% of customers have paid at least one full installment and another 16% have paid part installments (refer to Exhibit 1). Also, ~40% of AUM under moratorium has a vintage of two to three years (refer to Exhibit 2).

Outlook

We tweak our AUM and credit cost estimates for FY21/FY22E – as a result, our EPS is upgraded by 15–20% off a low base. Maintain Buy, with TP of INR245 (2x FY22E BVPS).

For all recommendations report, click here