Cholamandalam Investment - Growth Trajectory Healthy; Asset Quality Performance Impressive: Motilal Oswal
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Motilal Oswal Report
Contrary to our expectations, Cholamandalam Investment and Finance Company Ltd. has seen a quick turnaround in terms of both growth and asset quality.
Disbursement performance has been superior versus peers, while collection efficiency has consistently been 100% plus for the past few months. Macro indicators, such as e-way bills, also point to a strong recovery.
The company’s strategy to focus less on low-yielding products (such as heavy commercial vehicle financing) compared with high-yielding ones (such as tractor finance) has been fruitful.
With the cost of funds continuing to decline, coupled with the trimming of excess balance sheet liquidity, margins are poised to expand further going forward.
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