Cholamandalam Investment and Finance Company (CIFC IN) – Q2FY26 Result Update – Growth to pick up in H2; credit cost elevated – HOLD
Published on 07 Nov 2025
Q2 disbursements remained flat YoY due to a slowdown across segments. Lower capacity utilization and excess rain in the quarter led to sluggish growth; however, company is seeing green-shoots in Oct-25 driven by the benefit of GST cuts/ festive season. Factoring in the same, we retain our AUM growth estimate of 22%/ 21% in FY26/ FY27E. We expect NIM to improve supported by a lower CoF; opex to remain elevated as the company is in expansion mode (gold loans). Asset quality trends weakened in the quarter while credit cost stood elevated at 1.8%. While company saw higher stress in the CSEL portfolio, it expects a moderation in H2. We revise our credit cost assumptions for FY26/FY27E and slightly increase our Sep-27 ABV multiple to 3.8x (vs. 3.5x earlier) to arrive at a TP of Rs 1,725. Maintain HOLD as the stock price captures all the positives.
