Cholamandalam Investment shares fall 3% but Citi initiates buy

Cholamandalam Investment and Finance Company share price fell over 3 percent intraday on September 24 despite Citi initiating a buy on the stock with a target of Rs 300 per share.

The research firm is of the view that product mix and strong processes helped drive 19 percent AUM CAGR in FY15-20. It sees RoE recovering to 10 percent/16 percent in FY22, according to a CNBC-TV18 report.

Citi expects RoE compounding and rerating over two years to drive strong returns.

According to Moneycontrol SWOT Analysis powered by Trendlyne, the company has zero promoter pledge with FII / FPI or institutions increasing their shareholding.

Moneycontrol technical rating is bearish with moving averages and technical indicators being bearish.

Research and broking firm Angel Broking has a buy on the stock with a target of Rs 280 per share. It has a diversified product mix which helps them to capture growth in tractor and 2-wheeler segment. Adequate capital adequacy (20%+) and declined trend in the cost of fund and strong parentage provide comfort, it said.