CHOLAFIN

Cholamandalam Investment & Finance (CHOLAFIN) is one of India's highest-quality retail NBFCs. It has consistently delivered above-industry growth while maintaining good asset quality and profitability. It is part of the Murugappa Group, which has a strong reputation for governance. Investment Positives 1. Strong AUM Growth Management is guiding for 20–23% annual AUM growth in FY27. FY26 AUM grew around 21%, driven by vehicle finance, LAP, home loans and newer businesses like gold loans. 2. Diversified Loan Book The company is gradually reducing dependence on vehicle finance. Current business mix is shifting towards: Vehicle Finance Loan Against Property (LAP) Home Loans SME Loans Consumer Loans Gold Loans (fastest-growing segment) This diversification reduces business risk. 3. Improving Asset Quality Recent management commentary indicates: Lower Stage-2 assets Improving collections Credit cost expected around 1.5% This is a positive indicator for future profitability. 4. High Profitability Historically CHOLAFIN has maintained: ROA around 3%+ ROE around 18–20% Very few NBFCs consistently achieve these numbers. 5. Excellent Management Murugappa Group companies are known for conservative lending disciplined underwriting strong governance long-term capital allocation This is one of the biggest strengths of CHOLAFIN.