Ranvir's Portfolio

Cholamandalam Investment and Finance company -

Q4 and FY25 results and Concall highlights -

Q4 outcomes -

Q4 disbursements @ 26,417 cr, up 7 pc YoY
AUM @ 1.84 lakh cr, up 27 pc
NIMs @ 8 vs 7.8 pc
PBT - 1706 cr, up 19 pc
RoE - 22.2 vs 22.3 pc
Stage 3 assets @ 2.81 pc vs 2.48 pc
GNPAs @ 3.97 vs 3.54
NNPAs @ 2.63 vs 2.32

FY 25 outcomes -

Disbursements @ 1.01 lakh cr, up 14 pc
AUM @ 1.84 lakh cr, up 27 pc
NIMs @ 7.7 vs 7.5 pc
PBT - 5737 cr, up 25 pc
RoE - 19.8 vs 20.6 pc

Segmental performance -

Vehicle Finance -

Operating from 1564 branches across India. Focussed on CV, 2W, PV, Tractor and Construction equipment loans ( both old and new vehicles ). Focus continues to be on rural areas, smaller towns
Full yr Disbursement @ 53,922 cr, up 12 pc
Full yr PBT of 2824 cr, up 12 pc

LAP -

Giving out LAP to SME customers for their business needs. Operating out of 780 branches ( 771 branches co-located with vehicle finance ). 77 pc of loans are against self occupied residential properties
Full yr Disbursements @ 17,913 cr, up 32 pc
PBT of 1266 cr, up 30 pc

Home Loans -

Giving out home loans via 710 branches ( 667 branches co-located with vehicle finance ). Operating in the affordable home loans category
Full yr disbursements of 7404 cr, up 16 pc
PBT of 709 cr, up 45 pc

SME -

Loans to SME for supply chain financing, capex etc. Loans are extended against plant and machinery. Operating out of 95 co-located branches
Full yr disbursements @ 7763 cr, down 6 pc
PBT of 110 cr, up 36 pc

CSEL ( consumer and small enterprise loans ) -

Providing personal loans, professional loans, business loans to salaried, self employed and small businesses through 495 branches ( 494 co-located ). In this segment, company does tie up with fintech’s, partners like Samsung Finance ( for Samsung products ), D2C via Chola One app etc
Full yr Disbursements @ 12,552 cr, up 11 pc
PBT of 343 cr, up 39 pc

SBPL ( secured business and personal loans ) -

Provide Secure business and personal loans against self occupied residential properties through 414 co-located branches
Full yr disbursements @ 1316 cr, up 23 pc
PBT of 142 cr, up 312 pc

Total employees @ 64941
Total branches @ 1613
Total customers @ 43.72 lakh

Stage wise classification of assets -

Stage - 1 - 1.75 lakh cr
Stage - 2 - 4.7 k cr
Stage - 3 - 5.2 k cr
Provisions held by the company - 3.4 k cr

Segment wise Gross Stage 3 assets -

VF - 3.6 k cr, @ 3.52 pc of total assets
LAP - 795 cr, @ 2.02 pc of total assets
HL - 242 cr, @ 1.32 pc of total assets
CSEL - 306 cr, @ 2.06 pc of total assets
SME - 158 cr, @ 2.36 pc of total assets
SBPL - 63 cr, @ 2.59 pc of total assets

At corporate level-

Gross stage 3 assets @ 2.81 vs 2.48 pc
Provision coverage @ 45.27 vs 46.45 pc
Net Stage 3 assets @ 1.54 vs 1.33 pc

Revival of infra spending should lead to stronger growth in the vehicle finance segment in FY 26. Tractor segment did well in FY 25 as well

The used vehicles industry is growing at a faster pace with increase in organised players and financing options

Breakdown of company’s loan book -

VF - 55 pc
LAP - 22 pc
HL - 10 pc
CSEL - 8 pc
SME - 4 pc
SBPL - 1 pc

Breakdown of company’s VF book -

LCV - 21 pc
MUV - 12 pc
HCV - 7 pc
CE - 6 pc
Cars - 13 pc
Tractors - 6 pc
3 Wheelers - 1 pc
2 Wheelers - 7 pc
Used Vehicles - 28 pc

Segment wise losses and provisions -

VF - 1.6 pc
LAP - 0.2 pc
HL - 0.4 pc
SBPL - 1.4 pc
SME - 1.0 pc
CSEL - 5.8 pc

Corporate level losses and provisions @ 1.4 pc

Company intends to enter Gold loans business in select geographies

AUM growth guidance for FY 26 @ 20-25 pc

Expect to grow the Home Loans AUM @ 30 pc for next 2 yrs

Credit cost for CSEL,SME should progressively come down in FY 26

Aiming to grow the VF business @ 20 pc and other businesses @ 30 pc for next FY

As RBI keeps cutting rates, the lower cost of borrowing benefits should start to flow for the company. Expect NIMs to improve by 10-15 bps for FY 26 ( after adjusting for revisions on interest rates in their floating rate book )

Company is going slow on their CSEL book which they had built with some of their fin tech partners ( due increased slippages ). As this book starts to run down, credit cost should improve ( wef Q3 next yr )

Wrt VF, if the monsoons are good, company is hopeful of a falling credit cost. If this pans out as expected, should lower the corporate level credit costs in a meaningful way

Starting the Gold Loan business from 120 branches ( in South + East India ). Initially going slow. Once it stabilises and the company is confident ( say in 1 - 1.5 yrs ), they ll roll out this product PAN India

Except for the external fin-tech partnerships ( where the company has stopped lending and is waiting for the book to run down ), company’s internal app based ( Chola One ) business is growing at a good pace with great return ratios and manageable credit costs

Out of CSEL’s total loan book, external fin-tech based book is 8 pc of CSEL’s total loan book

The 120 gold loan branches are completely new branches ( not operating from pre-existing branches )

In SME lending, Supply chain finance is a competitive area with lower margins. Company intends to go slow here. Instead, they would focus on term loans and equipment financing which offer better yield and longer tenures

LAP and HL are high growth, low credit cost business for the company. Aim to keep growing these businesses at a brisk pace

The new regulations in TN wrt recovery of loans are applicable only to MFI and private lenders. Chola, bigger NBFCs and Banks aren’t affected. Similar legislations already exist in Karnataka, Telangana

For next 3-4 yrs, company intends to keep focussing on Gold loans + SBPL + CSEL + SME businesses. Till these 4 businesses are scaled up adequately, don’t intend to enter any new business segment

Company is able to do brisk business in tier -3,4 cities wrt PV finance and Maruti Suzuki as OEM

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

5 Likes