Cholamandalam Investment and Finance Company (CIFC IN) – Q2FY27 Result Update – Growth sustains with improvement in credit cost – BUY
Published on 29 Oct 2026
Q2 disbursements registered a strong growth of 47% YoY with broad-based growth across segments, resulting in an AUM growth of 25%. We expect growth momentum to sustain, supported by market share gains and distribution expansion and build AUM growth of 24%/ 23% for FY27/FY28E. NIM moderated in Q2 largely due to lower gains from DA transactions. We expect it to be stable at 7.1%/7.0% for FY27/FY28E, factoring in lower incremental funding requirements following the planned capital raise. Operating efficiencies aided improvement in opex ratio; branch expansion and productivity gains likely to support profitability. Asset quality remained stable with credit cost improving to 1.5%. We build a credit cost improvement of 20/4bps for FY27/FY28E. We revise our estimates upwards given the positive outlook on growth, credit cost and opex improvement. We value CIFC at a multiple of 3.4x Sep’28E P/ABV (vs. 3.5x earlier), arriving at a TP of INR2,000. Maintain ‘BUY’.
