ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Cholamandalam Financial Holdings's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 2.41%.
As of today (2026-07-09), Cholamandalam Financial Holdings's WACC % is 2.31%. Cholamandalam Financial Holdings's ROC % is 2.10% (calculated using TTM income statement data).
Cholamandalam Financial Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Cholamandalam Financial Holdings's WACC % is 2.31%. Cholamandalam Financial Holdings's ROC % is 2.10% (calculated using TTM income statement data).
Cholamandalam Financial Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Cholamandalam Financial Holdings ROC % Related Terms
Cholamandalam Financial Holdings ROC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Cholamandalam Financial Holdings (BOM:504973) has a ROC % of 2.41% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Cholamandalam Financial Holdings and its competitors.
Is Cholamandalam Financial Holdings' ROC % too high?
Cholamandalam Financial Holdings' current ROC % is 2.41%. The Credit Services industry median ROC % is 2.07. Cholamandalam Financial Holdings' value of 2.41% is 16.4% above this industry median. Overall, Cholamandalam Financial Holdings has a GF Score™ of 75/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Cholamandalam Financial Holdings' ROC % compare to V and MA?
Cholamandalam Financial Holdings' ROC % of 2.41% can be compared against companies in the Credit Services industry. The industry median ROC % is 2.07. Cholamandalam Financial Holdings' value of 2.41% is 16.4% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Credit Services company?
The median ROC % among Credit Services companies is 2.07, based on 417 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cholamandalam Financial Holdings's current ROC % of 2.41% is 16.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Cholamandalam Financial Holdings and its competitors. For the Credit Services industry, the median ROC % is 2.07 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cholamandalam Financial Holdings's current ROC % is 2.41%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Cholamandalam Financial Holdings stock overvalued right now?
Based on GuruFocus' analysis, Cholamandalam Financial Holdings (BOM:504973) is currently considered Modestly Undervalued. The stock's GF Value™ is ₹2,087.11, compared to a current price of ₹1,661.90 — trading 20.4% below its estimated fair value. The current ROC % is 2.41% and 16.4% above the Credit Services industry median of 2.07. Cholamandalam Financial Holdings' overall GF Score™ is 75/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Cholamandalam Financial Holdings (BOM:504973), the current ROC % is 2.41% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Cholamandalam Financial Holdings (BOM:504973) Overvalued in 2026?
Based on GuruFocus' analysis, Cholamandalam Financial Holdings stock appears to be undervalued.
The current stock price of ₹1,661.90 is trading 20.4% below its estimated GF Value™ of ₹2,087.11.
GuruFocus considers Cholamandalam Financial Holdings to be Modestly Undervalued.
Key valuation signals for BOM:504973:
ROC %: 2.41%
GF Value™: ₹2,087.11 vs. price of ₹1,661.90 (20.4% below fair value)
Industry Position: 16.4% above the Credit Services median
No single metric tells the full story. See the BOM:504973 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Cholamandalam Financial Holdings Business Description
Cholamandalam Financial Holdings Ltd along with its subsidiaries is a diversified investment company under the Murugappa Group. It offers financial services that include general insurance, residential mortgages, auto loans, risk services, and non-banking financial services. The company's activities are located exclusively in India. It has two primary product segments which include the Financial Services segment which derives key revenue and represents its lending business, and the Insurance and allied services segment.
75GF Score
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