Cholamandalam Financial Holdings Analysis

dividend

Pros

• Dividends paid are thoroughly covered by earnings (23.5x coverage).

Cons

• Dividend payments have increased, but Cholamandalam Financial Holdings only paid a dividend in the past 3 years.
• Cholamandalam Financial Holdings has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
• Cholamandalam Financial Holdings's pays a lower dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Cholamandalam Financial Holdings's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Performance (ROE) is expected to be above the current IN Consumer Finance industry average.
• An improvement in Cholamandalam Financial Holdings's performance (ROE) is expected over the next 3 years.

Cons

• Cholamandalam Financial Holdings is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Cholamandalam Financial Holdings's revenue is expected to decrease over the next 2 years.
• Cholamandalam Financial Holdings's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
• Cholamandalam Financial Holdings's revenues are expected to decrease over the next 1-3 years, this is below the India market average.

health

Pros

• Cholamandalam Financial Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Cholamandalam Financial Holdings is profitable, therefore cash runway is not a concern.
• Cholamandalam Financial Holdings is profitable, therefore cash runway is not a concern.
• Low level of unsold assets.

Cons

• Operating cash flow is negative therefore debt is not well covered.
• Debt is not covered by short term assets, assets are 0.2x debt.
• Cholamandalam Financial Holdings's long term commitments exceed its cash and other short term assets.
• The level of debt compared to net worth has increased over the past 5 years (472.3% vs 568.1% today).
• Interest payments on debt are not well covered by earnings (EBIT is 1.6x annual interest expense, ideally 3x coverage).
• Cholamandalam Financial Holdings's level of debt (568.1%) compared to net worth is high (greater than 40%).

management

Pros

Cons

• The average tenure for the Cholamandalam Financial Holdings board of directors is less than 3 years, this suggests a new board.

misc

Pros

Cons

• Cholamandalam Financial Holdings is covered by less than 3 analysts.
• Cholamandalam Financial Holdings has significant price volatility in the past 3 months.

past

Pros

• Cholamandalam Financial Holdings's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.
• Cholamandalam Financial Holdings used its assets more efficiently than the IN Consumer Finance industry average last year based on Return on Assets.
• Cholamandalam Financial Holdings has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).

Cons

• Cholamandalam Financial Holdings's 1-year earnings growth is negative, it can't be compared to the 5-year average.
• Cholamandalam Financial Holdings has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Cholamandalam Financial Holdings's 1-year earnings growth is negative, it can't be compared to the IN Consumer Finance industry average.

value

Pros

• Cholamandalam Financial Holdings is good value based on earnings compared to the IN Consumer Finance industry average.
• Cholamandalam Financial Holdings is good value based on earnings compared to the India market.

Cons

• Cholamandalam Financial Holdings's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Cholamandalam Financial Holdings's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Cholamandalam Financial Holdings is overvalued based on assets compared to the IN Consumer Finance industry average.
• 504973 underperformed the Consumer Finance industry which returned -28.8% over the past year.
• 504973 underperformed the Market in India which returned -14.5% over the past year.
• BSE:504973 is up 6.9% underperforming the Consumer Finance industry which returned 10.3% over the past month.
• BSE:504973 is up 6.9% underperforming the market in India which returned 8% over the past month.