Large Cap NBFC Stock Declared 65% Dividend, Soon To Trade Ex-Dividend, "Buy" Says HDFC Securities

Cholamandalam Investment & Finance Company Ltd. (Chola), a large-cap NBFC stock declared Interim Dividend on 31st January 2023. It also fixed the record date for said Interim Dividend. HDFC Securities has placed a buy on the stock with a target price of Rs 885/share, which implies an upside of 14%.

The company is one of the premier diversified NBFCs in India, engaged in providing vehicle finance, home loans and loans against property. It has a market capitalisation of Rs 64,195.47 crore. Below are the details about the stock:

Cholamandalam Investment and Finance Company Stock Performance

The stock of Chola last traded at Rs 781.15 apiece on NSE. The 52 week high of the stock is Rs 817.75/share as on 6 September 2022 and the 52 week low is 595.10/share as on 8 March 2022, respectively. In a week the stock gained 10.04% and in 1 month it gained 7.23%, respectively. In 1 year it gained 21.53%. In 3 years it gained 140.39%. In 5 years it gained 206.44%.

Cholamandalam Investment and Finance Company Ltd. Declared 65% Interim Dividend

According to the regulatory filing by the Board of Directors of Cholamandalam Investment and Finance Company Ltd. to NSE/BSE on January 21, 2023, "Payment of an interim dividend on the outstanding equity shares of the Company at the rate of 65% being Rs.1.30 per equity share of Rs.2/‐ each for the year ending 31st March 2023. Record date for the purpose of payment of interim dividend shall be 10th February, 2023. The interim dividend shall be paid to those shareholders whose names appear in the register of members as on the record date in respect of shares held in physical form and in case of shares held in dematerialised form, as per the details to be furnished by the depositories as on the record date. The interim dividend will be paid on or before 27th February, 2023."

HDFC Securities recommends buy the stock for Rs 885/share

According to the brokerage, Chola's Q3FY23 earnings were ahead of estimates on the back of better-than expected AUM growth (+31% YoY), steady NIMs (7.6%), and improving asset quality. Chola further pushed the accelerator on business growth with strong disbursal growth (+68% YoY). The management remains upbeat about growth prospects across segments-buoyant vehicle financing cycle, strong home loans demand and growing traction in new businesses (~21% of disbursals, and 7% of AUM) driven by expanding distribution network. "While management has indicated maintaining stringent credit filters on the new businesses (target pretax RoA of ~3.5%), we continue to monitor potential segment-wise profitability from these businesses. Asset quality stabilised with the stressed pool (GS-II + GS-III) now at 8.4% (pre-Covid levels of ~7%) as against IRAC-basis NNPA at 3.8%. We tweak our FY23/FY24 earnings by 1%/2% to factor in higher AUM growth, offset by rising opex intensity from new businesses; maintain BUY with a revised TP of INR885 (4.5x Sep-24 ABVPS)," the brokerage has said.

Disclaimer
The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.

Cholamandalam Investment and Finance Company Stock Performance

The stock of Chola last traded at Rs 781.15 apiece on NSE. The 52 week high of the stock is Rs 817.75/share as on 6 September 2022 and the 52 week low is 595.10/share as on 8 March 2022, respectively. In a week the stock gained 10.04% and in 1 month it gained 7.23%, respectively. In a1 year it gained 21.53%. In 3 years it gained 140.39%. In 5 years it gained 206.44%. 

Cholamandalam Investment and Finance Company Ltd. Declared 65% Interim Dividend

According to the regulatory filing by the Board of Directors of Cholamandalam Investment and Finance Company Ltd. to NSE/BSE on January 21, 2023, "Payment of an interim dividend on the outstanding equity shares of the Company at the rate of 65% being Rs.1.30 per equity share of Rs.2/‐ each for the year ending 31st March 2023. Record date for the purpose of payment of interim dividend shall be 10th February, 2023. The interim dividend shall be paid to those shareholders whose names appear in the register of members as on the record date in respect of shares held in physical form and in case of shares held in dematerialised form, as per the details to be furnished by the depositories as on the record date. The interim dividend will be paid on or before 27th February, 2023."

HDFC Securities recommends buy the stock for Rs 885/share

According to the brokerage, Chola's Q3FY23 earnings were ahead of estimates on the back of better-than expected AUM growth (+31% YoY), steady NIMs (7.6%), and improving asset quality. Chola further pushed the accelerator on business growth with strong disbursal growth (+68% YoY). The management remains upbeat about growth prospects across segments-buoyant vehicle financing cycle, strong home loans demand and growing traction in new businesses (~21% of disbursals, and 7% of AUM) driven by expanding distribution network. "While management has indicated maintaining stringent credit filters on the new businesses (target pretax RoA of ~3.5%), we continue to monitor potential segment-wise profitability from these businesses. Asset quality stabilised with the stressed pool (GS-II + GS-III) now at 8.4% (pre-Covid levels of ~7%) as against IRAC-basis NNPA at 3.8%. We tweak our FY23/FY24 earnings by 1%/2% to factor in higher AUM growth, offset by rising opex intensity from new businesses; maintain BUY with a revised TP of INR885 (4.5x Sep-24 ABVPS)," the brokerage has said. 

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.