Cholamandalam Investment and Finance Company Ltd.
ISIN: INE121A01024 • Market Cap: ₹1.59 Lakh Cr
The 5-Pillar Quality Audit for Cholamandalam Investment and Finance Company Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (68.6%), Return on Capital Employed (13.1%), and equity compounding (17.2%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 7.00 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (19.5%) and 3Y PAT CAGR (18.9%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 27.72 vs PEG of 1.33 and Dividend Yield of 0.1%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 49.2%, backed by 45.1% institutional ownership.
Key Fundamental Strengths
Strong Topline Expansion (3Y Sales CAGR: 19.5%)
Revenue has expanded at 19.5% CAGR over 3 years, signaling industry market-share gains.
High-Velocity Profit Compounding (3Y PAT CAGR: 18.9%)
Net earnings have compounded at 18.9% annualized, demonstrating operating leverage.
Deep Institutional Sponsorship (45.1%)
Mutual funds, domestic DIIs, and foreign FIIs hold 45.1%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Elevated Financial Gearing (D/E: 7.00)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Sectoral & Macro Headwinds (Financial Services)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Financial Services space.
Quantitative Strategy Eligibility
Checking CHOLAFIN against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 71/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Financial Services Sector Peer Comparison
Compare CHOLAFIN directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Cholamandalam Investment and Finance Company Ltd. (CHOLAFIN)Current | 71/100 | ₹1.59 Lakh Cr | 27.72 | 13.1% | 7.00 | — |
| HDFC Bank Ltd. (HDFCBANK) | 74/100 | ₹11.10 Lakh Cr | 14.05 | 12.8% | 1.01 | View |
| ICICI Bank Ltd. (ICICIBANK) | 76/100 | ₹10.06 Lakh Cr | 17.94 | 16.5% | 0.62 | View |
| State Bank of India (SBIN) | 71/100 | ₹9.66 Lakh Cr | 11.20 | 12.2% | 1.38 | View |
| Bajaj Finance Ltd. (BAJFINANCE) | 68/100 | ₹6.72 Lakh Cr | 33.07 | 13.9% | 3.86 | View |
| Life Insurance Corporation of India (LICI) | 87/100 | ₹5.22 Lakh Cr | 8.70 | 37.8% | 0.00 | View |
Frequently Asked Questions: Cholamandalam Investment and Finance Company Ltd.
Q:What is the 5-Pillar Fundamental Score for Cholamandalam Investment and Finance Company Ltd. (CHOLAFIN)?
Cholamandalam Investment and Finance Company Ltd. has a RupeeTools Fundamental Score of 71/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (74/100), Financial Health (45/100), Growth (86/100), Valuation (75/100), and Ownership Quality (82/100).
Q:Is CHOLAFIN fundamentally strong for long-term investment?
Yes, CHOLAFIN exhibits solid fundamental strength with a 71/100 score, driven by a return on equity of 17.2% and a debt-to-equity ratio of 7.00.
Q:Does CHOLAFIN pass the Coffee Can Investing filter?
No. CHOLAFIN does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does CHOLAFIN compare against other Financial Services peers?
Within India's Financial Services sector, CHOLAFIN trades at a P/E of 27.72 and generates an ROCE of 13.1%. Compare its 5-Pillar score of 71/100 against top sector peers like HDFC Bank Ltd. (74/100), ICICI Bank Ltd. (76/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.