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A tremendous stir is currently being witnessed in the Indian Non-Banking Financial Company (NBFC) sector. Cholamandalam Investment and Finance Company and Tata Capital, the two biggest and trusted names of the market, are currently on the radar of investors. The track record and market presence of both the companies is excellent, but considering the current market sentiment and future growth, investors are confused as to which stock will be more profitable to invest in.
Cholamandalam’s rural hold and strong asset quality
The biggest strength of Cholamandalam is its diversified loan portfolio and its strong penetration especially in rural and semi-urban areas. The company’s performance in the vehicle finance and home loan segments has been consistently good. According to brokerage reports, Cholamandalam has maintained its asset quality even in adverse economic conditions. The company’s digital strategy in terms of loan distribution is also proving to be very effective, due to which its operating margins are improving.
Tata Capital’s strong corporate backup and rapid expansion
On the other hand, the goodwill and trust of the Tata Group stands firmly with Tata Capital. Tata Capital is rapidly expanding its footprint in the fields of retail loans, wealth management and corporate financing. The company’s aggressive expansion in Tier-2 and Tier-3 cities is attracting investors. Experts believe that due to the benefit of Tata Group’s ecosystem, Tata Capital finds it easier to raise funds, due to which it is able to offer loans at competitive interest rates.
Latest opinion of brokerage firms and investment mantra for you
Leading domestic and global brokerage houses have closely analyzed the quarterly results and future roadmap of both the companies. Analysts say that if you want to bet on aggressive growth and rural recovery, then Cholamandalam can be a great pick. At the same time, if you are looking for long-term stability and safe returns with the trust of the Tata brand, then Tata Capital should be your first choice. However, experts advise that before making a big position in any NBFC, take special care of the risk management of your portfolio.