Cholamandalam Investment and Finance Company (CIFC IN) – Q3FY26 Result Update – Growth picking up; credit cost elevated – Upgrade to ‘BUY’
Published on 02 Feb 2026
We upgrade the rating to ‘BUY’ on better growth and credit cost outlook in Q4FY26/ FY27E. Q3 disbursements by CIFC saw a healthy YoY growth of 16% with pick-up across segments driven by the GST cuts, festive season demand, and improvement in capacity utilization. Factoring in a sustained momentum in Q4, we retain our AUM growth estimate of 22%/ 21% in FY26/ FY27E. We expect NIM to improve supported by a lower CoF and opex to remain elevated as CIFC is in the expansion mode (Gold Loans). Asset quality was largely flat QoQ; however, credit cost remained elevated at 1.8%. While CIFC saw higher stress across segments, it expects a moderation in Q4. We slightly tweak our credit cost assumptions for FY26/FY27E and roll forward to Mar’28 with a P/ABV multiple of 3.7x. The stock has corrected 12% over the past month. Upgrade to ‘BUY’ from ‘ACCUMULATE’ with unchanged TP of Rs1,850.
