Connect with Us 0 Comments, Be the first to comment + COMMENT Cholamandalam’s lending operations have a clear focus on rural and semi urban geographies Cholamandalam Investment and Finance Company Limited (Chola) is a panIndia non banking financial services company, headquartered at Chennai with zonal offices in Mumbai, Delhi and Kolkata. It is a part of the diversified Rs2.43 lakh crore Murugappa group of Tamil Nadu and has more than 500 branch offices in the country. Moneylife » Investing » Stocks » Cholamandalam: Attractive Longterm Buy Cholamandalam: Attractive Long term Buy MONEYLIFE DIGITAL TEAM | 27/05/2015 05:44 PM | Follow 6,331 followers [email protected]1,00,000 Readers Grab a Discount Coupon here Truncated national anthem played at Jayalalithaa's swearing in Army veteran declines to be present in a function to be attended by Defence Minister, CM How to Select Stocks for Building Long Term Wealth Will the new gold scheme succeed? Making Social Schemes Work Tax Tentacles – 7: Tax the source and not the person MONEYLIFE MAGAZINE PERSONAL FINANCE INVESTING COMPANIES & SECTORS ECONOMY & NATION LIFE
Cholamandalam’s lending operations have a clear focus on rural and semiurban geographies Cholamandalam Investment and Finance Company Limited (Chola) is a panIndia nonbanking financial services company, headquartered at Chennai with zonal offices inMumbai, Delhi and Kolkata. It is a part of the diversified Rs2.43 lakh crore Murugappagroup of Tamil Nadu and has more than 500 branch offices in the country.
Chola’s geographical and target groupis clear: rural and semiurban areas,selfemployed individuals and small &medium enterprises. Like other nonbanking financial companies(NBFCs), its business segmentsinclude vehicle finance, home loans,corporate finance, gold loans, ruralfinance, and construction equipmentfinance. The business risks of Cholaare nonpayment of loans advancedand the Reserve Bank of India’s(RBI’s) policy on interest rates. Chola’s return on total assets in FY1314 was 2.8% (3% in FY1213). This hasbeen achieved by a highly committedteam and domain knowledge of itstarget audience’s financial needs,according to the companymanagement. For the quarter ended
March 2015, its revenues jumped 10.70% to Rs937.77 crore from Rs847.10 crore and itsnet profit shot up to Rs135.64 crore, up 49.50%, from Rs90.73 crore. For the year endedMarch 2015, its net revenues were Rs3,690.46 crore (Rs3,261.78 crore) and its net profitwas Rs435.16 crore (Rs364.01 crore). Over the past five quarters, the average revenue growth of Chola was 14% and the averagegrowth in operating profit was 18%. The average operating margin is 18%. The marketcapitalisation of Chola is 2.28 times revenues and 12.25 times operating profit. The returnon net worth (RoNW) is 16% for FY1314. For FY1415 RoNW is 19% based on fourquarters of trailing net profits ended March 2015. The cash earnings per share wereRs27.04. The book value of Chola’s share is Rs159.90. Chola compares favourably with its peers inthe industry. Bajaj Finance has an operatingmargin of 26%, while Magma Fincorp andShriram City Union Finance have a marginof 9% and 25%, respectively. Similarly, theRoNW of Bajaj Finance is 21%, whileMagma Fincorp and Shriram City UnionFinance have a RoNW of 14% and 19%,respectively. The promoters, Murugappa group, hold57.75%, foreign institutional investors hold22.96% and domestic institutional investors hold 12.18%. The remaining 7.11%shareholding is with retail investors. Chola has distributed consistent dividends of 35%for FY1415, FY1314 and FY1213 on a face value of Rs10 per share. Its share price rosefrom a 52week low of Rs295 on 30 May 2014 to a 52week high of Rs633.05 on 16 April2015. The company’s share was trading at around Rs592 on 22 May 2015 and is anattractive longterm buy.
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