MOSL: CHOLAMANDALAM INV & FIN (Buy)-Slower growth in tough environment
Cholamandalam Inv & Fin: Slower growth in tough environment
(CIFC IN, Mkt Cap USD3.3b, CMP INR300, TP INR350, 17% Upside, Buy)
2QFY20 PAT/PBT grew 0.8%/14% YoY to INR3.1b/INR5.2b (in-line). Company also incurred a one-time tax impact of INR800m on DTA revision under the new tax rate regime.
- Disbursements grew 7% YoY to INR73.8b (v/s est. 22%), largely driven by muted growth in vehicle finance (5% YoY). In 1HFY20, disbursements grew 14% YoY to INR160b. According to management, disbursements in LCVs and tractors should pick up in 2HFY20 given the good monsoons, but those in HCVs are expected to take more time.
- AUM increased 3% QoQ/ 24% YoY to INR593b. Home Equity AUM growth of 18% YoY was the highest in the past 11 quarters. Interestingly, CIFC has assigned loans in the vehicle finance book after several quarters (INR8.3b).
Cholamandalam Investment and Finance Company Limited is a diversified non-banking finance company. The Company provides vehicle finance, home loans and corporate mortgage loans, small and medium enterprises (SME) loans, investment advisory services, stock broking and a range of other financial services. The Company focuses on vehicle finance, corporate finance, home equity loans and distribution of financial products. The Company operates from over 530 branches across India. The Company also offers Rural and Agri Loans, which include loans for purchase of tractors and farming equipment; wealth management, which includes mutual funds, fixed deposits and bonds, life and general insurance, and home loan, and securities, which include stock and derivatives, Internet broking, demat services, exchange traded funds and bonds. Its subsidiaries include Cholamandalam Securities Limited, Cholamandalam Distribution Services Limited and White Data Systems India Private Limited.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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