Cholamandalam Investment and Finance CompanyNSE:CHOLAFIN), previously known as Ti Financial Holdings, has gained more than 8% in today’s trade. The company is owned by the Murugappa Group. A detailed article on Murugappa Group is coming soon as an marketfeed editorial. The stock has hit a fresh 52-week high today, at Rs 390.
Peer financial stocks are also on the rise today. Mahindra & Mahindra Financial Services Limited is up by more than 2% today. Manappuram Finance Limited is up by more than 4% while Muthoot Finance is up by 2%. Shriram Transport Finance is up by close to 2.5%. We can see that mid-cap financial services stocks are rallying today.
CholaFin is a well-run financier focussing on vehicle finance with attractive return ratios, steady Net Interest Margins(NIM) and strong operating metrics. As economic conditions improve, the asset quality outlook is also improving. Collection efficiency of payments is getting better at an encouraging pace. The management expects less than 5% of portfolios to be restructured, which is positive.
The company had reported a 41% increase in profit after tax to Rs 432 crore for Q2 of financial year 2021. , The diversified financial services company had posted a profit after tax of Rs 307 crore in the corresponding quarter of the previous financial year.
“In the quarter, NIMs (net interest margins) improved compared to the same period last year. Operational expenses have been brought under control. The loan losses are also lower but we have additionally created Rs 250 crore of provisions,” the company’s Executive Vice-President and Chief Financial Officer Arulselvan D had said during the quarterly presentation.
Sharekhan has initiated Cholamandalam Investment with a Buy rating with a price target of Rs 430.