Macquarie maintains outperform rating on Cholamandalam Investment
Macquarie has maintained an 'outperform' rating on Cholamandalam Investment and Finance following a board rejig.
The company on Wednesday said that Vellayan Subbiah, who has been heading the firm since 2010, will step down as managing director when his term ends in August 2017.
The company also said that N Srinivasan, who is currently the finance director of Murugappa group, as executive vice chairman and MD of the company post the same for a period of two years.
"Under the existing leadership, CIFC has inculcated processes and structures which, we believe, put the company on a solid footing over the medium-term and is reflected in: a) better-than-peers asset quality; b) large investments in analytics; and, c) better risk-management framework. We thus do not expect significant operational changes under the new leadership," said Macquarie.
Macquarie added that it does not expect significant changes to the overall strategy of Cholamandalam Investment and expects a smooth transition as Srinivasan has been a Murugappa Group veteran. Macquarie's target price of Rs 1,095 implies an upside of 10% in the stock from current levels. Shares of the company ended up 1% at Rs 995 on the BSE on Thursday.
The company on Wednesday said that Vellayan Subbiah, who has been heading the firm since 2010, will step down as managing director when his term ends in August 2017.
The company also said that N Srinivasan, who is currently the finance director of Murugappa group, as executive vice chairman and MD of the company post the same for a period of two years.
"Under the existing leadership, CIFC has inculcated processes and structures which, we believe, put the company on a solid footing over the medium-term and is reflected in: a) better-than-peers asset quality; b) large investments in analytics; and, c) better risk-management framework. We thus do not expect significant operational changes under the new leadership," said Macquarie.
Macquarie added that it does not expect significant changes to the overall strategy of Cholamandalam Investment and expects a smooth transition as Srinivasan has been a Murugappa Group veteran. Macquarie's target price of Rs 1,095 implies an upside of 10% in the stock from current levels. Shares of the company ended up 1% at Rs 995 on the BSE on Thursday.
