Cholamandalam Investment and Finance Company Limited is a financial services provider which offers home loans, vehicle financing, loans against property, SME loans, rural & agriculture loans, and wealth management.Market Capitalisation
The market capitalisation of Cholamandalam Investment and Finance Company Limited, as of August 8, 2018, is a little over Rs.22,000 crore.
Company’s Wealth and Recent Performance
- For the quarter ended on June 30, 2018, Cholamandalam Investment and Finance Company Limited reported its total income to be at Rs.1,597.2 crore. This marks an increase of roughly Rs.300 crore in income over the corresponding quarter of the previous fiscal year.
- If we look at the segment wise revenue of the company, its vehicle finance segment has performed exceptionally well - a growth of roughly Rs.60 crore over the Q1 FY18.
- Consequently, the total profit for the period was reported to be at Rs.285.25 crore - a sizeable increase over the profit of Rs.209 crore reported for the June quarter of the FY18.
- The basic earnings per share for the quarter stood at Rs.18.25 as against Rs.13.42 reported for the same period, last year.
- Considering the quality of the assets, its Gross Non-Performing Assets (NPA) for the June quarter of the FY19 stood at 2.99% while its net NPA count for the same period is 1.71%. The provision coverage for the quarter was reported to be at 42.7%.
Cholamandalam Investment and Finance Company Limited Stock Trends in 2018
- On January 2, 2018, the opening price of the Cholamandalam Investment was Rs.1,315 on the National Stock Exchange. The first month of the year was rather uneventful for the investors as the stock didn’t make any steady gains. The scrip ended the month at Rs.1286.05.
- In early February, the company announced an interim dividend of 45%. This was followed by a rise in the stock price of Cholamandalam Investment and Finance Company Limited. As a result, the shares entered the Rs.1,400 region and the closing price on February 28, 2018 was Rs.1,469.95.
- Things didn’t change a lot in the month of March. The price dipped slightly over the course of the month but managed to recover in the final week. The closing price of Cholamandalam Investment shares was Rs.1,450 on the NSE.
- In April, the stock price of Cholamandalam rose dramatically on the back of anticipation of FY18 results and dividends. By the end of April, the share price had crossed the Rs.1,700 mark while reaching its 52-week high at Rs.1,760.05.
- However, this meteoric rise was followed by a bear run which took the price down to its previous levels at Rs.1,540. The closing price of Cholamandalam Investment shares on May 31 was Rs.1,528. In June, the prices dipped further but the shares did retain their bearings at levels above Rs.1,500.
- In the second half of July, the company announced an interim dividend of 20%. However, this didn’t do much to boost investors’ confidence as the share price continued to fall gradually. The scrip ended the month of July at Rs.1,430.65.
Cholamandalam Investment and Finance Company Limited Stock Trends in 2016 and 2017
- At the start of 2016, the share price of Cholamandalam Investment was around Rs.650. The prices didn’t vary a lot in the first two months as the shares maintained their bearings at those levels. An interim dividend of 25% was also announced in this period. The share price rose steadily in the month of March and by the end of the month, the shares had soared into the Rs.700 region.
- The scrip continued to be bullish through the months of April and May as well. The Cholamandalam Investment and Finance Company Limited stock price appreciated by a little over 20% in this period. The closing price of the scrip on May 31, 2016 was Rs.975.55 on the NSE.
- In early June, the shares breached the psychological barrier of Rs.1,000, although they failed to stabilise at those levels. As a result, the price dipped immediately and the shares retreated back to their previous levels at Rs.950. In July, the company announced a final dividend of 20%. This, in conjunction with developments in the company, took the stock price well past the Rs.1,000 mark.
- At the start of August, the stock price of Cholamandalam Investment was at levels above Rs.1,100. The shares were traded at those levels all the way till October with the closing price on October 31, 2016 being Rs.1,185.80.
- However, things changed dramatically post demonetisation. The scrip lost more than Rs.300 in a matter of weeks and by mid-December, the shares were being traded at levels varying from Rs.830 - Rs.870. The prices recovered slightly in the final week of the year and the scrip ended 2016 at Rs.988.20.
- 2017 started on an uneventful note for the investors. The share price rose gradually in the month of January to eventually cross the Rs.1,000 mark again. In February, an interim dividend of 35% was announced by the company but that didn’t do much to boost investors’ confidence. The stock price of Cholamandalam Investment and Finance Company went down and the shares found themselves in the Rs.900 territory.
- The shares continued to undergo such fluctuations through the course of April, May, and June as well. In this period, the Cholamandalam Investment shares gained a little over 15% to cross the Rs.1,100 mark by the end of June. In July, the company announced a final dividend of 20%. The shares continued to be traded at levels above Rs.1,100 all the way through September.
- In the final quarter of the year, the share price rose steadily to cross the Rs.1,200 mark. Since the start of the year, the scrip was up by a little over 20%. The closing price of Cholamandalam Investment shares on December 29, 2017 was Rs.1,299.55.
Should you invest in Cholamandalam Investment and Finance Company Limited?
- Cholamandalam Investment and Finance Company Limited is a financial services company that offers vehicle financing, home loans, SME loans, agri loans, and wealth management.
- Considering the financial performance of the company, for the Q1 FY19, it reported a sizeable increase in revenue and profit with respect to the same quarter of the previous fiscal year. The figures for the June quarter were reported to be at Rs.1,597.2 crore and Rs.285.25 crore respectively.
- Over the years, the company has reported a steady increase in the revenue from operations and consequently, net profit. Even its assets under management have increased substantially over the years, with the most recent figure standing at a little over Rs.45,000 crore.
- The company is also performing fairly well with respect to its peers. In terms of profit and sales turnover, it is in the fourth place, trailing behind the likes of Bajaj Finance and Shriram Transport Finance Company Limited. As the economy of India grows, the finance sector, especially the leasing and hire purchase segment, will have an important role to play. Cholamandalam Investment, owing to its immense network and sound management, is placed well to meet the demand in the future.
- The same has been reflected in the performance of its stock as well. The stock price has risen steadily since the start of 2016. In fact, by the end of 2017, the share price had doubled, thus delivering excellent returns to the investors. The price also surged in the first half of 2018, although uncertainties in the international markets have halted that rally.
- Before investing in this stock, it is strongly recommended that you do your own research before investing.
Cholamandalam Investment and Finance Company Limited is the financial services arm of the Murugappa Group. It offers a variety of financial services such as home loans, vehicle loans, SME loans, rural & agri loans, wealth management, and vehicle financing services. It started its operations in 1978 and back then, it focussed on providing equipment financing. The company has more than 800 branches across the country and has served more than 8 lakh customers.
History of the Company
Cholamandalam Investment and Finance Company Limited was incorporated in the year 1978 after being promoted by the Murugappa Group. The company started its operations by offering hire purchase and leasing services for equipment. The company’s shares were issued at par to the general public in 1980. In 1991, the company diversified its product offerings by introducing automobile finance. Over the course of the decade, the company also branched out into offering mutual funds, securities trading, and risk management. Eventually, the company also started offering loans against property, home loans, agri & rural loans, and wealth management services.
Management of the Company
Mr. M.M. Murugappan - Chairman and Non-Executive Director
Mr. Murugappan presently serves as the Executive Chairman of the Murugappa Corporate Advisory Board. He is considerably experienced in many diverse spheres such as business development & strategy, R&D, human resources, and technology. In addition to his present position, he also serves as the Non-Executive Chairman of the Board at TI Financial Holdings Limited, Coromandel International Limited, Tube Investments of India, and Carborundum Universal. He also serves as an independent director on other boards of companies like Mahindra & Mahindra and Cyient Limited. He graduated from the AC College of Technology, the University of Madras in Chemical Engineering and followed it with a Masters’ degree in the same field from the University of Michigan, U.S.A.
Mr. N. Srinivasan - Executive Vice-Chairman and Managing Director
Mr. Srinivasan presently serves as the Managing Director of Cholamandalam Investment and Finance Company Limited. He has held this post since August 2017. He also serves as the Lead Director of Financial Services Group at Murugappa Group Limited. In addition to this, he is the Director of Murugappa Holdings Limited and Cholamandalam Securities Limited. Prior to his association with the Murugappa Group, he worked with BHEL and Thiru Arooran Sugars Limited. He is also a member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India.
Mr. V. Srinivasa Rangan - Independent Director
Mr. Srinivasa Rangan currently serves as an Independent Director on the Board at Cholamandalam Investment and Finance Company Limited. As a graduate in Commerce, he has over 34 years of experience in banking and corporate finance. He has been associated with the Housing Development Finance Corporation Limited since 1986 and presently serves as the organisations’ Chief Financial Officer. He is also on the board of several other HDFC group of companies. In 2010, he was given the ‘Best CFO in the Financial Sector’ award by the Institute of Chartered Accountants of India.
Cholamandalam Investment and Finance Company Limited Listings in NSE, BSE, and Indices
The equity shares of Cholamandalam Investment and Finance Company Limited are listed on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. These shares are available to the general public for trading and the respective codes for the same are as follows:
- NSE Code: CHOLAFIN
- BSE Code: 511243
- ISIN: INE121A01016
- Sector: Finance - Leasing & Hire Purchase
As for the stock market indices, the company does not comprise the BSE Sensex and Nifty. However, it does comprise various other crucial stock market indices like:
- Nifty 200
- Nifty 500
- Nifty Midcap 100
- Nifty Midcap 50
- S&P BSE 500
- S&P BSE Finance
- S&P BSE AllCap
- S&P BSE LargeMidCap
- S&P BSE MidSmallCap
Cholamandalam Investment and Finance Company Limited
1st Floor, No. 2, N.S.C. Bose Road,
Chennai - 600001
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