Cholamandalam Financial Holdings Limited

Financial Services — Credit Services · NSE

₹1,359.10−₹18.50 (−1.34%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Cholamandalam Financial Holdings Limited, an investment company, provides financial services in India. It operates through Financing, Insurance, and Others segments.

IndustryCredit Services

SectorFinancial Services

Employees53,503

Annual revenue₹40,693 Cr

How does it make money?

Turns over ₹40,693 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 53,503 employees supports ₹76.1 lakh of revenue a year, the signature of a people-led business.

EBITDA margin18.0%

Net margin6.0%

Revenue / employee₹76.1 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.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

STATE BANK OF INDIAP/E 10.3x · ROE 15.2%

HDFC BANK LTDP/E 15.9x · ROE 13.8%

ICICI BANK LTD.P/E 18.1x · ROE 16.5%

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.

ROCE4.1%

ROE15.8%

Peer median ROE16.5%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 11.6% and earnings to grow about 22.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.6%

Est. earnings growth+22.4%

Analysts2

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 +110% while net margin moved -10% 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+110%

Margin effect-10%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Shareholders fund only 5.8% of the balance sheet — a thinner cushion than most peers carry
• Capital adequacy, gross NPAs and provision coverage decide a lender's financial health, and none are available here — check the bank's own quarterly disclosure

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

75/ 100

Cheap

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

9.6x

3Y Median

15.9x

40 monthly readings · mean 16.0x · range 10.5x–22.9x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 40% below its 3y median of 15.9x. 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 44% below the peer median of 17.0x.

vs. its own history

Cheap

15.9x median over 40 months · -40%

vs. sector peers

Cheap

17.0x median of 4 peers · -44%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

9.6x

P/B

1.65x

EV/EBITDA

31.1x

PEG

0.40

Dividend Yield

0.10%

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 8.0% to 15.8%.
Valuation below its historical average
At 9.6x the stock trades 40% below its own median of 15.9x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 19.6% to 18.0% over 3 years.
Receivables growing faster than sales
Receivables are up 230% against revenue growth of 110% — customers are taking longer to pay.
Short-term liquidity is tight
Current ratio of 0.85 — near-term obligations exceed near-term assets.

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 40% 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.
Cheaper than its peers
It trades 44% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Margins are being competed away
EBITDA margin has fallen from 19.6% to 18.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.

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

1Revenue growth stays above 21% a year✓ 28.0% CAGR
Latest reported year was 13.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 18.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 14%✓ 15.8%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 15.9x✓ 9.6x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 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 · 3 neutral · 3 weak

Market Cap

₹25,521 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

9.6x

Cheap

Cheap against the generic band

P/B Ratio

1.65x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹142.11

Profitable

Profitable on a per-share basis

ROE

15.8%

Strong

Strong capital efficiency

ROCE

4.1%

Weak

Low return on total capital employed

Debt/Equity

6.23x

High

High leverage

Revenue Growth (YoY)

13.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

39.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.10%

Modest

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

Free Cash Flow

-₹30,393 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1,359.1

P/E (Forward)

7.1x

Improving

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

Operating Margin

38.8%

Good

Healthy core-business profitability

Net Margin

11.9%

Good

Strong bottom-line conversion

Current Ratio

0.85

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.41

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1410.6 / 1492.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

42.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹19,381 Cr	₹27,276 Cr	₹34,837 Cr	₹40,693 Cr	+28.0%
EBITDA	₹3,800 Cr	₹5,224 Cr	₹6,501 Cr	₹7,308 Cr	+24.4%
EBITDA Margin	19.6%	19.2%	18.7%	18.0%	—
PAT (Net Profit)	₹1,290 Cr	₹1,773 Cr	₹2,174 Cr	₹2,441 Cr	+23.7%
EPS	₹68.72	₹94.39	₹115.76	₹130.01	+23.7%
ROE	8.0%	17.3%	17.4%	15.8%	—
ROCE	4.2%	4.2%	4.0%	4.1%	—
Total Debt	₹97,191 Cr	₹1.34 L Cr	₹1.74 L Cr	₹2.10 L Cr	+29.4%
Free Cash Flow	-₹29,589 Cr	-₹36,895 Cr	-₹34,543 Cr	-₹30,393 Cr	—

🟢 Revenue has grown at 28.0% a year over 3 years.

🟢 EBITDA has grown at 24.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 19.6% to 18.0% over 3 years (-1.6 pts).

🟢 PAT (Net Profit) has grown at 23.7% a year over 3 years.

🟢 EPS has grown at 23.7% a year over 3 years.

🟢 ROE has risen from 8.0% to 15.8% over 3 years (+7.8 pts).

🟡 ROCE has held roughly flat at 4.1% over 3 years.

🔴 Total Debt has grown at 29.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2.68 L Cr

Total Liabilities

₹2.34 L Cr

Total Debt

₹2.10 L Cr

Cash & Equivalents

₹8,475 Cr

Operating Cash Flow

-₹30,033 Cr

Capex

-₹360 Cr

Shareholding (proxy)

Institutional Holding

33.8%

Insider Holding

46.9%

Corporate Actions

Next Earnings

13 Nov 2026

Dividend Rate

₹1.3

Ex-Dividend Date

07 Aug 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹2,211.67

+62.7% vs CMP

Target Range

₹2,000 – ₹2,545

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 positive1 mixed4 general

Cholamandalam Financial Holdings (CHOLAHLDNG) Share Price Falls 2.14% Today

Univest, 16 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

CHOLAFIN Outlook for the Week

Equitypandit, 16 Oct

Cholamandalam Financial Holdings (CHOLAHLDNG.NS) Slips 2.18% to ₹1,474.8, Sitting Precisely Between Support and Resistance - Upthrust Pattern

https://www.siam.in/, 21 Sept

Here's Why We Think Cholamandalam Financial Holdings (NSE:CHOLAHLDNG) Might Deserve Your Attention Today

Simply Wall Street, 11 Sept

Cholamandalam Financial Holdings Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Cholamandalam Financial Holdings Q1 profit jumps 39% as disbursements rise

CNBC TV18, 14 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
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

🟡Business QualityAdequate12.5/20

🔴Financial HealthStretched8/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong12/15

🟢ValuationAttractive11.8/15

🟡RiskModerate6.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

This thesis breaks if

✓Revenue growth stays above 21% a year28.0% CAGR
✓EBITDA margin holds above 16%18.0%
✓Return on equity stays above 14%15.8%
✓Valuation vs its own median of 15.9x9.6x today