NSEI:CHOLAFIN

Stock Analysis Report

Cholamandalam Investment and Finance

Executive Summary

Cholamandalam Investment and Finance Company Limited, a non-banking finance company, provides various financial services in India.


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

How has Cholamandalam Investment and Finance's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHOLAFIN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-9.5%

CHOLAFIN

-2.6%

IN Consumer Finance

9.3%

IN Market


1 Year Return

-51.2%

CHOLAFIN

-33.9%

IN Consumer Finance

-29.6%

IN Market

Return vs Industry: CHOLAFIN underperformed the Indian Consumer Finance industry which returned -33.9% over the past year.

Return vs Market: CHOLAFIN underperformed the Indian Market which returned -29.6% over the past year.


Shareholder returns

CHOLAFINIndustryMarket
7 Day-9.5%-2.6%9.3%
30 Day-52.7%-47.1%-23.3%
90 Day-53.8%-44.8%-28.0%
1 Year-50.8%-51.2%-33.3%-33.9%-28.2%-29.6%
3 Year-25.8%-27.0%11.7%9.2%-15.8%-20.5%
5 Year23.2%19.9%83.2%74.9%-4.7%-9.6%

Price Volatility Vs. Market

How volatile is Cholamandalam Investment and Finance's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cholamandalam Investment and Finance undervalued compared to its fair value and its price relative to the market?

20.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CHOLAFIN (₹142.85) is trading below our estimate of fair value (₹179.49)

Significantly Below Fair Value: CHOLAFIN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CHOLAFIN is good value based on its PE Ratio (8.6x) compared to the Consumer Finance industry average (10.2x).

PE vs Market: CHOLAFIN is good value based on its PE Ratio (8.6x) compared to the Indian market (9.4x).


Price to Earnings Growth Ratio

PEG Ratio: CHOLAFIN is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: CHOLAFIN is overvalued based on its PB Ratio (1.7x) compared to the IN Consumer Finance industry average (0.6x).


Next Steps

Future Growth

How is Cholamandalam Investment and Finance forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

14.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHOLAFIN's forecast earnings growth (14.4% per year) is above the savings rate (6.5%).

Earnings vs Market: CHOLAFIN's earnings (14.4% per year) are forecast to grow slower than the Indian market (19.5% per year).

High Growth Earnings: CHOLAFIN's earnings are forecast to grow, but not significantly.

Revenue vs Market: CHOLAFIN's revenue (11.9% per year) is forecast to grow faster than the Indian market (9% per year).

High Growth Revenue: CHOLAFIN's revenue (11.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHOLAFIN's Return on Equity is forecast to be low in 3 years time (18.1%).


Next Steps

Past Performance

How has Cholamandalam Investment and Finance performed over the past 5 years?

23.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHOLAFIN has high quality earnings.

Growing Profit Margin: CHOLAFIN's current net profit margins (32.5%) are higher than last year (32.3%).


Past Earnings Growth Analysis

Earnings Trend: CHOLAFIN's earnings have grown significantly by 23.1% per year over the past 5 years.

Accelerating Growth: CHOLAFIN's earnings growth over the past year (15.6%) is below its 5-year average (23.1% per year).

Earnings vs Industry: CHOLAFIN earnings growth over the past year (15.6%) underperformed the Consumer Finance industry 15.6%.


Return on Equity

High ROE: CHOLAFIN's Return on Equity (19.3%) is considered low.


Next Steps

Financial Health

How is Cholamandalam Investment and Finance's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CHOLAFIN has a low level of unsold assets or inventory.

Debt Coverage by Assets: CHOLAFIN's debt is covered by short term assets (assets are 1.1x debt).


Financial Institutions Analysis

Asset Level: CHOLAFIN's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if CHOLAFIN has a sufficient allowance for bad loans.

Low Risk Liabilities: CHOLAFIN reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if CHOLAFIN has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CHOLAFIN has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if CHOLAFIN has an appropriate level of bad loans.


Next Steps

Dividend

What is Cholamandalam Investment and Finance's current dividend yield, its reliability and sustainability?

1.19%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CHOLAFIN's dividend (1.19%) is higher than the bottom 25% of dividend payers in the Indian market (0.94%).

High Dividend: CHOLAFIN's dividend (1.19%) is low compared to the top 25% of dividend payers in the Indian market (4.06%).


Stability and Growth of Payments

Stable Dividend: CHOLAFIN's dividend payments have been volatile in the past 10 years.

Growing Dividend: CHOLAFIN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (7.8%), CHOLAFIN's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CHOLAFIN's dividends in 3 years are forecast to be thoroughly covered by earnings (8.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average board tenure


CEO

Arun Alagappan (43yo)

0.42

Tenure

₹36,961,000

Compensation

Mr. Arun Alagappan has been Managing Director of Cholamandalam Investment and Finance Company Ltd. since November 15, 2019. Mr. Alagappan is a Promoter and a member of the Murugappa family. Mr. Alagappan s ...


CEO Compensation Analysis

Compensation vs Market: Arun's total compensation ($USD490.85K) is about average for companies of similar size in the Indian market ($USD666.73K).

Compensation vs Earnings: Arun's compensation has increased by more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Arun Alagappan
MD & Executive Director0.42yr₹36.96m0.12% 136.1m
Ravindra Kundu
President0.25yr₹2.85m0.010% 11.5m
Murugappan Murugappan
Chairman of the Board1.75yrs₹912.00k0.0027% 3.0m
Ashok Barat
Independent Director2.5yrs₹1.24mno data
Rohan Verma
Independent Director1.08yrs₹14.00kno data
Bhama Krishnamurthy
Independent Director0.75yrno datano data
N. Rajan
Additional Independent Director1.5yrs₹444.00kno data

1.5yrs

Average Tenure

63yo

Average Age

Experienced Board: CHOLAFIN's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CHOLAFIN insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Cholamandalam Investment and Finance Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cholamandalam Investment and Finance Company Limited
  • Ticker: CHOLAFIN
  • Exchange: NSEI
  • Founded: 1978
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: ₹113.399b
  • Shares outstanding: 791.34m
  • Website: https://www.cholamandalam.com

Number of Employees


Location

  • Cholamandalam Investment and Finance Company Limited
  • Dare House
  • 1st Floor
  • Chennai
  • Tamil Nadu
  • 600001
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
511243BSE (Mumbai Stock Exchange)YesEquity SharesININRJul 1994
CHOLAFINNSEI (National Stock Exchange of India)YesEquity SharesININRJul 1994

Biography

Cholamandalam Investment and Finance Company Limited, a non-banking finance company, provides various financial services in India. The company operates through three segments: Vehicle Finance Loans, Home Equity, and Other Loans. It offers two wheeler and commercial vehicle loans, tractor loans, car and MUV loans, and construction equipment loans, as well as loans to automobile dealers; loans against properties; home loans for self-construction, loans for the purchase of plots and ready to occupy homes, and balance transfer facility for existing home loans; home equity loans; business loans for small and medium enterprises; rural and agri-loans; and refinance against existing vehicles. The company also provides wealth management services that cover mutual funds, fixed deposits, bonds and debentures, and life and general insurance, as well as PMS, IPO, ETF, and SIP services; investment advisory services; and stock broking services for mutual funds, stocks and derivatives, exchange traded funds, and bonds, as well as Internet broking, demat, and depository participant services. As of March 31, 2019 it operated through a network of 911 branches. The company was founded in 1978 and is headquartered in Chennai, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 13:35
End of Day Share Price2020/04/01 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.