Current Rating and Its Significance
MarketsMOJO’s 'Buy' rating for Cholamandalam Investment & Finance Company Ltd indicates a positive outlook for the stock, suggesting that investors may consider adding or holding the stock in their portfolios. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The upgrade to 'Buy' from a previous 'Hold' rating reflects an improvement in the company’s overall mojo score, which increased by 6 points to 71.0 as of the rating update date.
Quality Assessment
As of 05 February 2026, Cholamandalam Investment & Finance Company Ltd demonstrates excellent quality metrics. The company boasts a strong long-term fundamental strength, with an average Return on Equity (ROE) of 17.68%, signalling efficient capital utilisation and profitability. Operating profit has grown at an impressive annual rate of 26.37%, underscoring robust business expansion and operational efficiency. These factors contribute to the company’s excellent quality grade, positioning it favourably among its peers in the Non-Banking Financial Company (NBFC) sector.
Valuation Considerations
Despite the strong fundamentals, the stock is currently classified as very expensive in terms of valuation. This suggests that the market price reflects high expectations for future growth, which may limit the margin of safety for new investors. However, the premium valuation is often justified by the company’s consistent performance and growth prospects. Investors should weigh the valuation against the company’s quality and financial trends to make informed decisions.
Financial Trend and Recent Performance
The financial trend for Cholamandalam Investment & Finance Company Ltd remains positive as of 05 February 2026. The latest quarterly results highlight record-breaking figures, including net sales reaching ₹7,898.21 crores and PBDIT (Profit Before Depreciation, Interest, and Taxes) hitting ₹5,344.19 crores. Additionally, cash and cash equivalents stood at a high ₹10,409.74 crores for the half-year period, indicating strong liquidity and financial health. These figures reflect the company’s ability to generate cash flow and sustain growth momentum.
Technical Outlook
From a technical perspective, the stock is mildly bullish. Recent price movements show resilience, with a one-week gain of 4.17% and a six-month return of 16.77%. The stock has delivered a 24.09% return over the past year, outperforming the BSE500 index consistently over the last three annual periods. This technical strength supports the positive rating and suggests that the stock may continue to attract investor interest in the near term.
Institutional Confidence
Institutional investors hold a significant 44.11% stake in Cholamandalam Investment & Finance Company Ltd. This high level of institutional ownership often indicates confidence from sophisticated market participants who have the resources to analyse company fundamentals thoroughly. Such backing can provide stability to the stock price and is a positive signal for retail investors.
Sector and Market Position
Operating within the NBFC sector, Cholamandalam Investment & Finance Company Ltd is classified as a large-cap company, which typically implies a degree of stability and market influence. The company’s consistent returns and strong fundamentals place it among the top 1% of companies rated by MarketsMOJO across a universe of over 4,000 stocks, highlighting its elite status in the Indian equity market.
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- - Top-rated across platform
- - Strong price momentum
- - Near-term growth potential
Investor Takeaway
For investors, the 'Buy' rating on Cholamandalam Investment & Finance Company Ltd signals a favourable opportunity to consider the stock for portfolio inclusion. The company’s excellent quality metrics, positive financial trends, and supportive technical indicators provide a strong foundation for potential capital appreciation. However, the very expensive valuation grade advises caution and suggests that investors should monitor price movements and market conditions closely.
Performance Snapshot
As of 05 February 2026, the stock’s recent returns include a 1-day decline of 1.17%, a 1-month dip of 3.08%, but a solid 6-month gain of 16.77%. Year-to-date, the stock has appreciated by 0.97%, while the one-year return stands at a robust 24.09%. These figures demonstrate resilience and consistent outperformance relative to broader market indices, reinforcing the stock’s appeal.
Conclusion
Cholamandalam Investment & Finance Company Ltd’s current 'Buy' rating by MarketsMOJO reflects a comprehensive assessment of its strong fundamentals, positive financial trajectory, and encouraging technical signals. While valuation remains on the higher side, the company’s consistent growth, institutional backing, and market leadership in the NBFC sector make it a compelling consideration for investors seeking quality stocks with growth potential in the Indian market.
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