Target: ₹820
CMP: ₹774.85
The AUM of Cholamandalam Investment and Finance Company (CIFC) grew strongly at 8.9 per cent q-o-q/31.3 per cent y-o-y to ₹95,468 crore, led by strong disbursements — up 19.8 per cent q-o-q. Vehicle finance (64.2 per cent of AUM) grew 6.4 per cent/20.9 per cent q-o-q/y-o-y. Loan against property (20.9 per cent of portfolio) grew 6.1 per cent/18.2 per cent q-o-q/y-o-y and new business including home loans grew 26.4 per cent/176.3 per cent q-o-q/y-o-y. New businesses and home loans’ share in AUM mix is up to 14.9 per cent in Q3 23 from 12.8 per cent in Q2 23. NIMs remained flat on a q-o-q basis at 7.77 per cent.
CIFC’s AUM growth is expected to be driven by three new businesses: Consumer and small enterprise loans; secured business and personal loans; and small and medium enterprise loan business financing etc. The new businesses, launched last year, saw exponential growth, recording disbursements of ₹3,780 crore, up 20.7 per cent q-o-q.
We maintain ‘Buy’ rating and increase our TP to ₹820 (4.4x on September 24E PABV) from ₹792 (earlier:4.2x September 24E PABV). We have increased our multiple as company is scaling up its new business verticals very strongly and vehicle demand is also strong. .