Cholamandalam Investment & Finance Gains 4.93%: 6 Key Factors Driving the Rally

29 December 2025: Steady Start Amid Market Weakness

Cholamandalam Investment & Finance began the week at Rs.1,698.35, posting a modest gain of 0.09% despite the Sensex falling 0.41% to 37,140.23. The stock’s resilience in a declining market set a positive tone for the week, supported by steady volume of 10,195 shares. This relative strength indicated early investor interest ahead of anticipated fundamental and technical developments.

30 December 2025: Upgrade to Buy Sparks Confidence

The stock advanced 0.22% to Rs.1,702.15 as MarketsMOJO upgraded Cholamandalam Investment & Finance’s Mojo Grade from Hold to Buy, citing strong fundamentals and bullish technicals. The upgrade was driven by robust financial metrics including a 17.68% average ROE, 25.48% annual operating profit growth, and a high institutional holding of 44.12%. Technical indicators such as bullish daily moving averages and positive momentum oscillators reinforced the upgrade’s rationale. The Sensex remained flat, down 0.01%, underscoring the stock’s outperformance.

31 December 2025: Technical Momentum Strengthens

On the last trading day of 2025, Cholamandalam’s price was virtually unchanged at Rs.1,702.25 (+0.01%), but technical momentum indicators showed a marked improvement. The stock’s daily moving averages turned decisively bullish, and the Know Sure Thing (KST) oscillator was positive on weekly and monthly charts. Although the weekly MACD was mildly bearish, the monthly MACD remained bullish, signalling sustained long-term momentum. The Sensex rebounded 0.83% to 37,443.41, but Cholamandalam’s technical strength suggested potential for further gains.

1 January 2026: Mildly Bullish Outlook Amid Consolidation

The stock closed at Rs.1,723.30, gaining 1.24% on the day with increased volume of 20,711 shares. Technical momentum shifted to a mildly bullish stance, reflecting a phase of consolidation after recent gains. The weekly MACD remained mildly bearish, but the monthly MACD stayed bullish, indicating longer-term strength. Bollinger Bands suggested moderate upward pressure, while the Relative Strength Index (RSI) remained neutral. The Sensex rose 0.14% to 37,497.10, with Cholamandalam outperforming the benchmark.

2 January 2026: New 52-Week High and Intraday Surge

Cholamandalam Investment & Finance reached a new 52-week high of Rs.1,788.60, closing at Rs.1,780.55 with a robust 3.32% gain on heavy volume of 77,379 shares. The stock’s intraday high of Rs.1,779.90 represented a 3.17% surge, outperforming the Sensex’s 0.81% rise to 37,799.57. This marked the fifth consecutive day of gains, cumulatively adding 5.28%. The stock traded above all key moving averages, signalling sustained technical strength. The recent Mojo Grade upgrade and strong fundamentals underpinned this rally, with the company’s premium valuation reflecting market confidence.

Weekly Price Performance: Cholamandalam vs Sensex

Key Takeaways

Positive Signals: The week’s 4.93% gain significantly outpaced the Sensex’s 1.35%, driven by a combination of strong fundamentals, technical upgrades, and institutional confidence. The Mojo Grade upgrade to Buy on 30 December 2025 reflected improved quality and momentum, supported by a 17.68% ROE and 25.48% operating profit growth. Technical indicators such as bullish moving averages, positive KST readings, and a new 52-week high at Rs.1,788.60 reinforced the stock’s upward trajectory. The stock’s ability to trade above all major moving averages and sustain volume gains further confirms robust demand.

Cautionary Notes: Despite the positive momentum, some weekly technical indicators like the MACD and Dow Theory showed mild bearishness, suggesting potential short-term consolidation or profit-taking. The stock’s premium valuation, with a Price to Book ratio of 5.6 and PEG ratio of 1.6, implies elevated market expectations that require sustained earnings growth to justify. The relatively low dividend payout ratio of 3.95% indicates a focus on reinvestment rather than income, which may not appeal to all investor segments. Monitoring upcoming quarterly results and sector dynamics remains essential to assess ongoing momentum.

Conclusion

Cholamandalam Investment & Finance Company Ltd’s performance over the week ending 2 January 2026 highlights a compelling blend of fundamental strength and technical momentum. The stock’s 4.93% gain, outpacing the Sensex by over 3 percentage points, was fuelled by a rating upgrade, sustained institutional backing, and a new 52-week high milestone. While some short-term technical indicators suggest caution, the overall outlook remains positive, supported by robust long-term returns and a favourable market environment for NBFCs. Investors should balance the premium valuation against the company’s growth prospects and remain attentive to evolving market signals in the coming weeks.

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