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Cholamandalam Investment and Finance company -
Q1 FY 26 results and concall highlights -
AUM @ 1.92 lakh cr, up 24 pc
Disbursements @ 24.32 k cr vs 24.33 k cr YoY
NII - 3865 vs 3033 cr, up 27 pc
Operating expenses - 1453 vs 1183 cr, up 27 pc
Credit losses - 881 vs 583 cr, up 52 pc
PBT - 1530 cr, up 21 pc
PAT - 1136 vs 942 cr, up 21 pc
NIMs @ 7.8 vs 7.6 pc
RoA @ 3.1 vs 3.2 pc
RoE @ 18.8 vs 18.9 pc
Cost of funds @ 7 pc
Avg yeild on advances @ 14.8 pc
Cost to Income @ 37.6 vs 39 pc - healthy improvement
GNPAs @ 4.29 vs 3.62 pc
NNPAs @ 2.86 vs 2.37 pc
Loan losses and provisions ratio @ 1.8 vs 1.5 pc
Breakup of loan book -
Vehicle Finance - 1.04 vs 0.88 lakh cr
LAP - 43.9 vs 32.12 k cr
Housing Loans - 19.4 vs 14.5 k cr
CSEL ( consumer and small enterprise loans - unsecured ) - 14.2 vs 12.9 k cr
SME loans - 7.1 vs 5.5 k cr
SBPL ( secured business and personal loans ) - 2.6 vs 1.6 k cr
Company started Gold Loans business in Q1 FY 25 and opened 73 independent Gold Loan branches till 30 Jun 25
NIMs improved YoY to 7.8 vs 7.6 pc - further expected to rise as RBI’s rate transmissions take further effect
Seeing signs of stress in Vehicle finance and Consumer finance ( CSEL ) business
Early onset of monsoons and excess rains / floods / landslides etc did impact the vehicle utilisation levels and led to some stress building up in this sector
Company expects credit costs to start inching downwards post the monsoons and with the beginning of the festive season ( specially on the back of strong rural incomes )
Company is hoping for pickup in CV + PV sales so that they can grow their AUMs quicker ( they r still able to grow by increasing their mkt share )
In CSEL segment, treading very cautiously so as to maintain their internal asset quality tgts
Credit cost guidance for full FY 26 @ 1.4-1.5 pc
In Q2 every year, company resorts to pay hikes - may lead to some hike in opex in Q2
Because of lower cost of funds ( + factor ) and passing down lower rates of borrowing ( - factor ), expecting NIMs to improve by 10-15 bps by end of FY 26
The increase in bounce rates in secured lending ( LAP, HL, SBPL ) are completely within manageable limits - hence the company feels there is no need to go slow down disbursements in these segments. They have as such slowed down disbursements in CSEL - where they r seeing increased stress
Guiding for AUM growth of 20-25 pc for FY 26
Unlike smaller NBFC’s - Chola did not attribute current asset quality issue to over leveraging by retail customers as the main culprit. In their view - its general sluggishness in the economy + early monsoon related disruptions
Disc: holding, biased, not SEBI registered, posted for educational purposes, hoping for a recovery in asset quality and accelerated disbursements in H2 ( as guided by management )
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