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The market asks roughly as much of Cholamandalam Finance as of Shriram Finance.
At current prices, buyers of Cholamandalam Finance are assuming about 23.6% return on equity against 20.0% in its own record; for Shriram Finance it is 20.3% against 16.1%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: both on excess return.
- Size: Shriram Finance is worth about 1.4 times Cholamandalam Finance on the stock market.
- Record: Cholamandalam Finance has grown revenue faster: Cholamandalam Finance compounded at about 24% a year (FY2019–FY2026) and Shriram Finance at about 19% (FY2020–FY2026).
- What to watch: loan growth at Cholamandalam Finance; return on equity at Shriram Finance.
| Cholamandalam Finance | Shriram Finance | |
|---|---|---|
| Price | ₹1,850 | ₹970 |
| Market cap | ₹1.59L Cr | ₹2.28L Cr |
| P/E | 25.0 | 18.0 |
| P/B | 5.21 | 3.46 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
01Two businesses
The Murugappa group's lender
Cholamandalam Investment and Finance, part of the Chennai-based Murugappa group, is one of India's largest non-bank lenders. Its core is vehicle finance — new and used cars, commercial vehicles and tractors — especially in smaller towns.
Lending to India's truck owners
Shriram Finance was formed in December 2022 by merging Shriram Transport Finance and Shriram City Union Finance. It is India's largest lender for used commercial vehicles, financing truck operators and small transport businesses, many of them first-time borrowers.
02The records side by side
Cholamandalam Finance has grown revenue faster: Cholamandalam Finance compounded at about 24% a year (FY2019–FY2026) and Shriram Finance at about 19% (FY2020–FY2026). By revenue, Shriram Finance is about 1.5 times the size of Cholamandalam Finance. Cholamandalam Finance kept 16.8% of revenue as net profit in FY2026; Shriram Finance kept 20.8% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: Cholamandalam Finance · Shriram Finance.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Loan growthRapid book growth drives earnings.
- Return on equityHolding high returns as it diversifies is the key test.
- Return on equityHigh returns for lending to riskier borrowers.
- Loan growthGrowth in vehicle and small-business lending.
05What could go wrong
- Vehicle cycleA slowdown in vehicle sales cuts new lending.
- Unsecured lendingConsumer and small-business loans can sour quickly.
- Freight cycleA slowdown in trucking hits borrowers' ability to repay.
- Credit qualitySmall-business borrowers are vulnerable in downturns.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is Cholamandalam Finance or Shriram Finance better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, Cholamandalam Finance trades at 25.0 times earnings and 5.21 times book value, and Shriram Finance at 18.0 times earnings and 3.46 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between Cholamandalam Finance and Shriram Finance?
Cholamandalam Investment and Finance, part of the Chennai-based Murugappa group, is one of India's largest non-bank lenders. Shriram Finance was formed in December 2022 by merging Shriram Transport Finance and Shriram City Union Finance.
Are Cholamandalam Finance and Shriram Finance valued the same way?
Yes — both on excess return, so their workings compare like for like.
What does today's price assume for Cholamandalam Finance and Shriram Finance?
Worked backwards from the share price, Cholamandalam Finance needs about 23.6% return on equity and Shriram Finance about 20.3% return on equity, against 20.0% and 16.1% in their own records.