Shares of Cholamandalam Investment and Finance Company surged more than 9 percent and hit a 52-week high of Rs 970.2 in Thursday's trade after the company reported a 24.5 percent rise in its standalone March quarter profit at Rs 855 crore. The Murugappa group's financial services arm had registered a profit of Rs 689.6 crore during the corresponding quarter of last fiscal.
At 11.52 am, the stock was trading 7 percent higher at Rs 948.45 on NSE. On a year-to-date basis, the stock has surged 29.60 percent, while it has risen 33 percent in the last one year.
The average target price of the stock is Rs 853.78, which shows an downside of 10 percent from the current market prices, according to Trendlyne data.
The standalone total income for the March quarter jumped 44 percent to Rs 3,794.3 crore as against Rs 2,631.8 crore it registered in the same quarter a year ago. For fiscal FY23, the standalone total income rose by 28 percent to Rs 12,978 crore as compared to Rs 10,138.8 crore registered last year.
"First look result was very good as assets under management (AUM) growth beating our lofty expectations a strong positive. Strong traction is seen in new business also a strong positive," said Akshay Ashok, Research Analyst at Prabhudas Lilladher, adding that the stock is richly valued at 4.7 times FY24 P/ABV (price to adjusted book value) . The brokerage has a 'hold' rating on the stock with a target price of Rs 820.
"In management call tomorrow we would look forward to hearing from management how new business verticals are shaping up and guidance for opex and whether they can sustain such high growth in the quarters going ahead. We would also like to hear about the collection and credit quality monitoring steps they are taking as they are managing to show such strong growth especially in the new businesses," the analyst added.
The company has also recommended a final dividend of Re 0.70 per equity share for financial year 2023. The dividend will be paid within 30 days from the date of annual general meeting (i.e., on or before August 30, 2023), upon approval by the shareholders at the 45th AGM.
First Published: May 4, 2023 12:11 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
