Cholamandalam Investment and Finance Company Limited

Financial Services — Credit Services · NSE

₹1,574.40−₹11.60 (−0.73%)

DalalBaazaar Score

80 / 100

🟢 Strong

Verdict

ATTRACTIVE

Risk

Low

Driven by negative free cash flow.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Cholamandalam Investment and Finance Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Cholamandalam Investment and Finance Company Limited, operates as a non-banking finance company in India. The company operates through Vehicle Finance, Loan Against Property, Home Loans, and Other Loans segments.

IndustryCredit Services

SectorFinancial Services

Employees51,320

Annual revenue₹16,752 Cr

How does it make money?

Turns over ₹16,752 Cr a year. Of every ₹100 of sales, about ₹31 reaches shareholders as profit. Each of its 51,320 employees supports ₹32.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹32.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE16.5%

What is the outlook?

30 analysts covering the stock expect revenue to grow about 22.2% and earnings to grow about 21.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+22.2%

Est. earnings growth+21.0%

Analysts30

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +134% while net margin moved -16% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+134%

Margin effect-16%

DalalBaazaar Score

80/ 100

Strong

Weighted across six categories. Every point is explained below.

✓ Beta of 0.49 — historically steadier than the index
✓ Large-cap: deep liquidity and broad analyst coverage
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

83/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

63/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

23.3x

3Y Median

34.5x

40 monthly readings · mean 34.0x · range 25.5x–44.0x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 33% below its 3y median of 34.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 37% above the peer median of 17.0x.

vs. its own history

Cheap

34.5x median over 40 months · -33%

vs. sector peers

Expensive

17.0x median of 4 peers · +37%

vs. generic bands

Fair

15x–35x

EV/EBITDA

—

PEG

0.92

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 33% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 37% above the peer median. That premium needs a reason that persists, or it closes.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 25% a year✓ 32.8% CAGR
Latest reported year was 34.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2Return on equity stays above 15%✓ 17.2%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 34.5x✓ 23.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 10 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹1.35 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

23.3x

Fair

Fairly valued against the generic band

P/B Ratio

4.40x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹67.61

Profitable

Profitable on a per-share basis

ROE

17.2%

Strong

Strong capital efficiency

ROCE

Not meaningful

N/A for lenders

Banks and NBFCs don't report capital employed the way other businesses do

Debt/Equity

6.95x

High

High leverage

Revenue Growth (YoY)

34.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

43.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.13%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹30,286 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

16.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

56.6%

Good

Healthy core-business profitability

Net Margin

40.5%

Good

Strong bottom-line conversion

Beta (vs Nifty)

0.49

Defensive

Steadier than the market

52W Range Position

42%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1637.0 / 1770.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

37.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,145 Cr	₹9,939 Cr	₹13,411 Cr	₹16,752 Cr	+32.8%
PAT (Net Profit)	₹2,665 Cr	₹3,420 Cr	₹4,263 Cr	₹5,233 Cr	+25.2%
EPS	₹32.38	₹41.06	₹50.6	₹61.83	+24.1%
ROE	18.6%	17.5%	18.0%	17.2%	—
Total Debt	₹97,524 Cr	₹1.35 L Cr	₹1.76 L Cr	₹2.12 L Cr	+29.5%
Free Cash Flow	-₹27,295 Cr	-₹36,759 Cr	-₹32,613 Cr	-₹30,286 Cr	—

🟢 Revenue has grown at 32.8% a year over 3 years.

🟢 PAT (Net Profit) has grown at 25.2% a year over 3 years.

🟢 EPS has grown at 24.1% a year over 3 years.

🔴 ROE has fallen from 18.6% to 17.2% over 3 years (-1.4 pts).

🔴 Total Debt has grown at 29.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2.45 L Cr

Total Liabilities

₹2.15 L Cr

Cash & Equivalents

₹10,890 Cr

Operating Cash Flow

-₹30,021 Cr

Capex

-₹265 Cr

Shareholding (proxy)

Institutional Holding

34.2%

Insider Holding

51.9%

Corporate Actions

Next Earnings

28 Oct 2026

Dividend Rate

₹2

Ex-Dividend Date

21 Jul 2026

Analyst Consensus

Recommendations

27 Buy · 5 Hold · 0 Sell

Target Price (Mean)

₹2,000.63

+27.1% vs CMP

Target Range

₹1,645 – ₹2,140

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

1 mixed5 general

CHOLAFIN Outlook for the Week

Equitypandit, 16 Oct

Is Cholamandalam Investment and Finance the Best Stock in Its Sector? A Look at the Numbers

Univest, 12 Oct

Cholamandalam Investment and Finance (BSE:511243) Stock Price

Simply Wall Street, 10 Oct

CHOLAFIN Share/Stock Price Live, NSE

TechGraph, 09 Oct

Top stocks to buy in F&O segment: M&M, Shree Cements, Cholamandalam Investment by Jay Thakkar - Check targets

Livemint, 13 Oct

Earnings call transcript: Cholamandalam posts strong Q1 2026 growth, shares slip

Investing.com, 28 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

All 3 tripwires holding · see Key things to watch ↑