Cholamandalam is showing signs of accumulation, supported by a double bottom pattern and sectoral tailwinds, according to an analyst.
Cholamandalam Investment and Finance Company stock is showing positive signs on the daily chart after finding strong support near its 55-day exponential moving average (EMA), according to SEBI-registered analyst Deepak Pal.
The stock had been consolidating within a narrow range between its 14-day and 55-day EMAs, hinting at a bullish bias, Pal said.
On Friday, the stock opened at ₹1,584.80, touched a high of ₹1,599.00, but ended the session lower at ₹1,550.10. Despite the decline, the analyst noted that it held above the crucial short-term support near ₹1,525 and formed a higher low at ₹1,536.10, indicating buying interest at lower levels.
On the hourly chart, a double bottom pattern is forming, often seen as a bullish reversal indicator, Pal said, adding that positive movement in peer NBFCs like Jio Financial further reinforces sector sentiment.
The analyst stated that if the stock sustains its price above ₹1,535–₹ 1,540, a retest of the recent high near ₹1,600 could be expected. A breakout above that could open the door to ₹1,650. He suggested setting a stop-loss at ₹1,490.
The company operates across vehicle finance, SME loans, home loans, and consumer lending, with a strong presence in rural and semi-urban markets. Its diversified assets under management (AUM) stands at over ₹1.35 lakh crore.
In FY24, it delivered strong results with revenue exceeding ₹16,000 crore and net profit over ₹2,700 crore, supported by NIMs of 8% and a healthy GNPA of 3.1%. It has a capital adequacy ratio of about 20% and ROE of 18–20%.
Recent RBI relaxations and rising credit demand further strengthen its outlook, positioning it well for sustained growth, Pal added.
Retail sentiment on Stocktwits turned 'bullish' from 'neutral' a day ago.
Year-to-date, Cholamandalam stock has gained over 30%.
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