Cholamandalam Investment and Finance Company (CIFC IN) – Company Update – Sifting through the noise – Upgrade to ACCUMULATE
Published on 02 Jan 2026
We assert our positive stance on CIFC, post the Cobrapost report alleging corporate governance issues against the company/ Muruguppa Group. Company is guiding for overall growth momentum to sustain at ~20%+ over the medium-term; we build 21% CAGR over FY25-28E. We expect NIM (calc.) to trend at ~7% over FY26-28E with pick-up in CV/ new business verticals compensating for margin pressure in HL. Scale up of higher-yielding new businesses is crucial to maintain margins. Expect opex spend to be stable with productivity gains flowing through over FY26-28E. While credit cost is likely to be elevated at 1.6% in FY26E due to stress in the CSEL/ fintech lending portfolio, expect it to improve to 1.4% by FY28E. Stock is trading at 4.4x 1-yr fwd P/ABV backed by a strong franchise; we roll forward to Dec-27 and slightly tweak our multiple to 3.9x. Upgrade to ACCUMULATE with a TP of Rs 1,850 on steady growth trajectory over FY25-28E, stable NIM outlook and moderation in credit cost.
