1. At a Glance
The Murugappa Group’s financial arm holds 45% of Chola Finance, 60% of Chola MS General Insurance, and 49.5% of a niche risk services JV. With an ROE of 19%, this Core Investment Company (CIC) blends boring with brilliance.
2. Introduction with Hook
If Cholamandalam Financial Holdings were a Bollywood character, it would be the stern-yet-silent dad who owns half the city. You won’t see it dance, but its children – Chola Finance and Chola Insurance – do all the grooving.
- ₹33,125 Cr FY25 revenue
- ₹4,740 Cr FY25 PAT
- ROE of 19% and P/E of 18.2
Murugappa ke paison ka asli karta-dharta yahaan baitha hai.
3. Business Model (WTF Do They Even Do?)
Chola Financial is a Core Investment Company (CIC) regulated by RBI, meaning:
- It can’t lend directly.
- It exists to own things.
- Specifically:
- 45.41% of Cholamandalam Investment & Finance (CIFCL)
- 60% of Cholamandalam MS General Insurance
- 49.5% of Cholamandalam MS Risk Services (JV with Mitsui Sumitomo)
Think of it as a financial Thanos collecting infinity stones. The actual cash cow? CIFCL – the 4-wheeler, 2-wheeler, LAP, and home loan machine.
4. Financials Overview
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | ₹33,125 Cr | ₹25,830 Cr | ₹18,154 Cr |
| EBITDA | ₹18,855 Cr | ₹14,441 Cr | ₹9,558 Cr |
| Net Profit | ₹4,740 Cr | ₹3,851 Cr | ₹2,810 Cr |
| OPM % | 57% | 56% | 53% |
| EPS | ₹115.76 | ₹94.39 | ₹68.71 |
Growth Engine: 3-year Sales CAGR: 31%. PAT CAGR: 29%. And EPS is climbing faster than your landlord’s rent demand.
5. Valuation
At ₹2,105 per share, is Chola Financial fairly valued?
Let’s deconstruct the holdco:
- CIFCL (Market Cap: ₹99,000 Cr) × 45.41% = ₹44,959 Cr
- Chola MS General Insurance (Est. Valuation: ₹15,000 Cr) × 60% = ₹9,000 Cr
- Add some more for CMS Risk and other investments: ₹1,000–₹1,500 Cr
- Total NAV = ₹55,000 Cr
- Holdco Discount (common for CICs): ~35%
Fair Value Range (Post Holdco Discount): ₹35,750 Cr – ₹39,000 Cr
Divide by 18.6 Cr shares:
→ FV Range: ₹1,920 – ₹2,100
At CMP ₹2,105… it’s kissing the ceiling.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 earnings on Aug 8 – Street’s watching CIFCL loan book and insurance float growth
- FIIs have been loading up – From 11.8% to 17.68% in 2 years
- Management continues to demerge & simplify group structure – Expect clarity, but not chaos
- Chola Finance expanding into SME lending – Margin booster
- Insurance biz growth remains robust but not IPO-ready yet.
7. Balance Sheet
| Item | FY25 | FY24 | FY23 |
|---|---|---|---|
| Equity Capital | ₹19 Cr | ₹19 Cr | ₹19 Cr |
| Reserves | ₹12,496 Cr | ₹10,223 Cr | ₹7,642 Cr |
| Borrowings | ₹1,74,366 Cr | ₹1,34,014 Cr | ₹97,191 Cr |
| Total Assets | ₹2,24,616 Cr | ₹1,76,917 Cr | ₹1,31,033 Cr |
Key Points:
- Leverage is high – typical for NBFCs.
- Equity base hasn’t expanded much; growth comes from earnings power.
- Debt:Equity is a spicy ~13.9x — but under control within RBI CIC norms.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|
| FY25 | ₹(34,201) Cr | ₹(1,038) Cr | ₹39,652 Cr | ₹4,413 Cr |
| FY24 | ₹(35,726) Cr | ₹(2,625) Cr | ₹38,269 Cr | ₹(82) Cr |
| FY23 | ₹(29,329) Cr | ₹295 Cr | ₹27,288 Cr | ₹(1,746) Cr |
TL;DR:
Borrow, lend, repeat. Welcome to NBFC-core-holdco cash flow 101.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 | FY24 | FY23 |
|---|---|---|---|
| ROE | 19% | 19% | 18% |
| ROCE | 11% | 11% | 10% |
| OPM | 57% | 56% | 53% |
| Interest Coverage | <2x | <2x | <2x |
| P/E | 18.2x | 19.5x | 21x |
Verdict: Margins? Sexy. Interest coverage? Hmm. ROE? Straight outta CDSL’s dreams.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | Expenses | EBITDA | PAT |
|---|---|---|---|---|
| FY25 | ₹33,125 Cr | ₹14,271 Cr | ₹18,855 Cr | ₹4,740 Cr |
| FY24 | ₹25,830 Cr | ₹11,389 Cr | ₹14,441 Cr | ₹3,851 Cr |
| FY23 | ₹18,154 Cr | ₹8,597 Cr | ₹9,558 Cr | ₹2,810 Cr |
Net margins at 14.3% and rising. Scale = profits = happy shareholders = Murugappa smiles.
11. Peer Comparison
| Company | CMP | P/E | ROE | Mcap | BV | CMP/BV |
|---|---|---|---|---|---|---|
| Chola Financial | ₹2,105 | 18.2 | 19% | ₹39,540 Cr | ₹666 | 3.16x |
| Aditya Birla Cap | ₹270 | 21.3 | 11.5% | ₹70,562 Cr | ₹232 | 1.16x |
| Tata Inv. Corp | ₹6,594 | 107 | 1% | ₹33,420 Cr | ₹6,160 | 1.07x |
| TVS Holdings | ₹12,019 | 21.2 | 30.6% | ₹24,408 Cr | ₹2,320 | 5.18x |
Position: Not the cheapest, not the flashiest — but probably the most reliable core holdco on Dalal Street.
12. Miscellaneous – Shareholding, Promoters
| Entity | Mar 2025 | Mar 2023 | Change |
|---|---|---|---|
| Promoter | 46.45% | 48.39% | ↓ |
| FIIs | 17.68% | 11.82% | ↑↑ |
| DIIs | 21.80% | 25.64% | ↓ |
| Public | 13.62% | 13.93% | → |
Key Insight:
FIIs are loading up like it’s Diwali season at Ritchie Street. They know something? Or just insurance + NBFC = eternal compounding logic?
13. EduInvesting Verdict™
Cholamandalam Financial Holdings is not your typical finance stock. It’s the Murugappa empire’s invisible hand – a triple-barreled financial cannon (NBFC + Insurance + Risk Services) firing on all cylinders.
Pros:
- Robust stake in high-growth Chola Finance
- Insurance biz poised for re-rating
- Solid ROE + Margin combo
- Professional governance
Cons:
- Holdco discount isn’t going anywhere
- Cash flow and debt levels require vigilance
- Not a direct lender, so valuation isn’t simple
Final Word:
This isn’t a trade. It’s a trust fund. You either believe in the Murugappa flywheel, or you miss the compounding bus.
Metadata
– Written by EduInvesting Research Team | 17 July 2025
– Tags: Core Investment Company, NBFC, Murugappa Group, Insurance, Chola Finance, Holding Company Analysis, India Financial Sector
