Cholamandalam Investment & Finance Company Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are thoroughly covered by earnings (7.9x coverage).
• Dividends after 3 years are expected to be thoroughly covered by earnings (10.4x coverage).
• Cholamandalam Investment and Finance's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).

Cons

• Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
• Cholamandalam Investment and Finance's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Cholamandalam Investment and Finance's earnings are expected to grow significantly at over 20% yearly.
• Cholamandalam Investment and Finance's earnings growth is expected to exceed the India market average.
• Cholamandalam Investment and Finance's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Cholamandalam Investment and Finance's net income is expected to increase by more than 50% in 2 years time.
• Performance (ROE) is expected to be above the current IN Consumer Finance industry average.
• An improvement in Cholamandalam Investment and Finance's performance (ROE) is expected over the next 3 years.
• Cholamandalam Investment and Finance's revenue growth is expected to exceed the India market average.

Cons

• Cholamandalam Investment and Finance's earnings are expected to decrease over the next year.
• Cholamandalam Investment and Finance is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Cholamandalam Investment and Finance's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Cholamandalam Investment and Finance's revenue is expected to grow by 7.4% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Cholamandalam Investment and Finance is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Cholamandalam Investment and Finance is profitable, therefore cash runway is not a concern.
• Cholamandalam Investment and Finance is profitable, therefore cash runway is not a concern.
• Debt is covered by short term assets, assets are 1.1x debt.
• Cholamandalam Investment and Finance's cash and other short term assets cover its long term commitments.
• Low level of unsold assets.

Cons

• Operating cash flow is negative therefore debt is not well covered.
• The level of debt compared to net worth has increased over the past 5 years (612.7% vs 669.3% today).
• Cholamandalam Investment and Finance's level of debt (669.3%) compared to net worth is high (greater than 40%).

management

Pros

• Arun's remuneration is about average for companies of similar size in India.
• More shares have been bought than sold by Cholamandalam Investment and Finance individual insiders in the past 3 months.

Cons

• The average tenure for the Cholamandalam Investment and Finance board of directors is less than 3 years, this suggests a new board.
• Arun's compensation has increased by more than 20% in the past year whilst earnings fell less than 20%.

misc

Pros

Cons

• Cholamandalam Investment and Finance has significant price volatility in the past 3 months.

past

Pros

• Cholamandalam Investment and Finance has delivered over 20% year on year earnings growth in the past 5 years.

Cons

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

value

Pros

• Cholamandalam Investment and Finance is good value based on expected growth next year.

Cons

• Cholamandalam Investment and Finance's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Cholamandalam Investment and Finance's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Cholamandalam Investment and Finance is overvalued based on assets compared to the IN Consumer Finance industry average.
• Cholamandalam Investment and Finance is overvalued based on earnings compared to the IN Consumer Finance industry average.
• Cholamandalam Investment and Finance is overvalued based on earnings compared to the India market.
• 511243 underperformed the Consumer Finance industry which returned -28.8% over the past year.
• 511243 underperformed the Market in India which returned -14.5% over the past year.
• BSE:511243 is up 4.2% underperforming the Consumer Finance industry which returned 10.3% over the past month.
• BSE:511243 is up 4.2% underperforming the market in India which returned 8% over the past month.