CLSA on Chola Investment & Fin
Downgrade to Hold, TP Rs 1600
Stock now trades at 4x PB (FY27), a mere 9% discount to the market leader, Bajaj Finance.
In the past, it has rarely traded at such elevated multiples, & only in scenarios where its AUM growth was 30-40%.
Today, growth is in mid-20s & expect a 18-20% Cagr over next 2 yrs
While Chola is favourably poised to benefit from a rate cut cycle, an extra 25bp rate cut only improves its NIM by 7-8bp & EPS by c.2%
Downgrade to Hold, TP Rs 1600
Stock now trades at 4x PB (FY27), a mere 9% discount to the market leader, Bajaj Finance.
In the past, it has rarely traded at such elevated multiples, & only in scenarios where its AUM growth was 30-40%.
Today, growth is in mid-20s & expect a 18-20% Cagr over next 2 yrs
While Chola is favourably poised to benefit from a rate cut cycle, an extra 25bp rate cut only improves its NIM by 7-8bp & EPS by c.2%
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