Earnings Review
Cholamandalam Investment's PAT jumps, but misses Street view
This story was originally published at 19:33 IST on 25 October 2024
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--Cholamandalam Jul-Sept net profit INR 9.63 bln
--Analysts saw Cholamandalam Jul-Sept net profit INR 9.93 bln
--Cholamandalam Jul-Sept net profit INR 9.63 bln vs INR 7.62 bln year ago
--Cholamandalam Jul-Sept revenue INR 62.27 bln vs INR 44.35 bln year ago
--Cholamandalam gross NPA ratio 3.78% as on Sept 30 vs 3.62% on Jun 30
--Cholamandalam net NPA ratio 2.48% as on Sept 30 vs 2.37% on Jun 30
--Cholamandalam AUM INR 1.774 tln as on Sept 30, up 33% on year
--Cholamandalam Jul-Sept disbursements INR 243.14 bln, up 13% on year
--Cholamandalam Jul-Sept vehicle fin disbursements INR 123.36 bln, up 5% YoY
--Cholamandalam Apr-Sept net profit INR 19.05 bln vs INR 14.89 bln year ago
--Cholamandalam Apr-Sept revenue INR 120.11 bln vs INR 84.98 bln year ago
By Aaryan Khanna
NEW DELHI – Cholamandalam Investment and Finance Co. Ltd. posted a sharp increase in net profit for the quarter ended September, as net interest income zoomed and fee income from diversified businesses picked up. However, it missed analysts' estimates as asset quality worsened and operational expenses piled up.
The non-banking financier posted a net profit of INR 9.63 billion in Jul-Sept, against the INR 9.93 billion average of estimates of 10 analysts. The bottom line rose 26.3% on year, but only 2.2% from a quarter ago. The company derives about half its business from vehicle financing, with the other half contributed by loans against property, home loans and micro, small and medium enterprises.
The firm's net interest income rose nearly 35% to INR 27.13 billion in the reporting quarter, according to calculations by Informist. Fee and commission income more than doubled to INR 4.11 billion, helping revenue from operations surge 40.4% on year to INR 62.27 billion in Jul-Sept. Other income halved to INR 661.5 million due to a lack of dividend income from a subsidiary, the company said in the exchange filing.
For the half year ended September, net profit rose 28.0% to INR 19.05 billion, while revenue was up by nearly half to INR 120.11 billion. Shares of the non-bank financial company ended 1.01% lower at INR 1,372.20 on the National Stock Exchange Friday. The company announced its earnings during market hours.
In the September quarter, the company's total assets under management grew 33% on year to INR 1.774 trillion and disbursements increased 13% on year to INR 243.14 billion. Of the disbursements, loans against property grew 35% on year and home loans rose 16%. Vehicle financing, the company's largest vertical, saw disbursements rise only 5% on year.
Total expenses rose 40.6% on year to INR 49.94 billion. All components on this side of the ledger rose at a healthy pace, with finance costs up nearly 40% to INR 30.55 billion and impairment of financial instruments rising by over half to INR 6.24 billion, on an annual basis in Jul-Sept.
The impairments were due to deteriorating asset quality for the second straight quarter. As of Sept. 30, the gross non-performing asset ratio rose to 3.78% from 3.62% a quarter ago and the net bad loan ratio inched up to 2.48% at the end of September against 2.37% a quarter ago.
Stage 3 levels, indicating loans due over 90 days, rose to 2.83% as of Sept. 30 from 2.62% a quarter ago. At the end of the September quarter, the provision coverage ratio of the non-bank lender was 44.49%, as against 45.50% a quarter ago. The capital adequacy ratio was 19.50% as of Sept. 30, against 18.03% a quarter ago. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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