What’s behind the Cholamandalam stock surge?

Inadequate bad debt provisioning in the face of declining asset quality has helped the company clock impressive profit growth.

Cholamandalam Investment and Finance Co. is no Bajaj Finserv. Its assets are less than a quarter and its top line a third that of India’s leading non-banking financial company.

Yet, in 2021-22, Cholamandalam outperformed the country’s most valued NBFC on two key metrics. Its share price and profit growth outpaced Bajaj Finserv’s by 20x and 22x, respectively. These put Cholamandalam—the financial services arm of diversified business conglomerate Murugappa Group—right at the top of the sector. 

They also helped Cholamandalam add 20,397 shareholders since June 2021—a 21% rise in the number of shareholders. On the face of it, the surge suggests …


Furquan Moharkan

Furquan leads the banking coverage at The Morning Context. A business journalist with eight years of experience and a best-selling author, in his earlier stints as a reporter with the Deccan Herald and a columnist at The Banker, he wrote on banking, financial markets and regulatory affairs. He has extensively covered India's debt market crisis, banking crisis and the fall of Yes Bank.

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