Brokerages broadly highlighted strong disbursement momentum and margin improvement, while flagging elevated credit costs as a key monitorable. | Photo Credit: iStockphoto
Shares of Cholamandalam Investment and Finance Company rallied 9 per cent in early trade after the lender reported a steady set of December-quarter numbers and announced an interim dividend.
The stock jumped as much as 9 per cent to ₹1,740 on the NSE before paring gains. At 10 am, it was trading 5.5 per cent higher at ₹1,681.10.
The company posted a standalone net profit of ₹1,287.66 crore for the quarter ended December 2025, up 18 per cent year on year from ₹1,086.53 crore. Revenue from operations rose 17 per cent to ₹7,874.94 crore compared with ₹6,709.21 crore in the corresponding period last year.
The board also approved an interim dividend of ₹1.30 per share, with February 5 set as the record date.
Brokerages broadly highlighted strong disbursement momentum and margin improvement, while flagging elevated credit costs as a key monitorable.
Motilal Oswal said Cholamandalam Investment delivered a mixed operating performance, noting that a healthy pickup in disbursements during the festive season and following GST cuts drove assets under management growth of 21 per cent year on year. The brokerage pointed out that credit costs remained high because of write-offs and slippages, though an improvement in Stage-2 assets could translate into better Stage-3 trends in the March quarter. It added that margins expanded around 10 basis points quarter on quarter on better yields and a decline in cost of funds.
Motilal Oswal reiterated its buy rating with a target price of ₹2,000, saying the stock trades at 3.7 times FY27 estimated book value and needs sustained AUM growth and improving asset quality to justify the premium valuation.
PL Capital upgraded the stock to buy from accumulate, citing improved growth visibility and a better credit-cost outlook into Q4FY26 and FY27. The brokerage highlighted 16 per cent year-on-year growth in Q3 disbursements across segments and retained its AUM growth estimates of 22 per cent and 21 per cent for FY26 and FY27 respectively. While credit cost stayed elevated at 1.8 per cent, PL Capital said management expects moderation ahead and kept its target price unchanged at ₹1,850, noting the stock had corrected 12 per cent over the past month.
JM Financial described the quarter as broadly in line, with AUM rising 21 per cent year on year and net interest income up 24 per cent, helped by a modest expansion in margins. It noted operating profit was impacted by a one-off labour-code related expense, while credit cost improved marginally to 1.78 per cent.
Although it trimmed its FY27 and FY28 earnings estimates by around 3 per cent due to potential pressure on margins from yield hardening, JM Financial upgraded the stock to add from reduce, saying downside looked limited at current valuations. It revised its target price to ₹1,720.
HDFC Securities also pointed to the strong business momentum and reflation in margins but persistently high credit costs. The brokerage said disbursement growth of 16 per cent year on year and 23 per cent quarter on quarter is likely to strengthen further in Q4 on the back of GST cuts and a better macro environment. However, it cautioned that valuations at around 3.8 times September-27 adjusted book value offer limited margin of safety and maintained an add rating with a revised target price of ₹1,730.
Nuvama Institutional Equities struck a more cautious tone, acknowledging strong growth in disbursals led by a revival in commercial vehicles and healthy pre-provision operating profit growth, but flagged sticky non-performing loans and rising credit costs. The brokerage said improvement in asset quality remains a key monitorable and maintained a hold call at ₹1,650 target price.
Published on February 3, 2026