Earnings Review
Cholamandalam Invest misses PAT view; disbursements stagnate
This story was originally published at 17:27 IST on 31 July 2025
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--Cholamandalam Invest Apr-Jun net profit INR 11.36 bln
--Analysts saw Cholamandalam Invest Apr-Jun net profit at INR 12.26 bln
--Cholamandalam Invest Apr-Jun PAT INR 11.36 bln vs INR 9.42 bln year ago
--Cholamandalam Invest Apr-Jun revenue INR 72.45 bln vs INR 57.85 bln yr ago
--Cholamandalam Invest gross NPA ratio 4.29% as on Jun 30 vs 3.97% on Mar 31
--Cholamandalam Invest net NPA ratio 2.86% as on Jun 30 vs 2.63% on Mar 31
--Cholamandalam Invest provision coverage ratio 34.41% as on Jun 30
--Cholamandalam Invest AUM INR 2.08 tln as on Jun 30, up 23% YoY
--Cholamandalam Invest Apr-Jun disbursements INR 243.25 bln vs INR 243.32 bln
--Cholamandalam Invest Q1 vehicle fin disbursements INR 136.47 bln, up 7% YoY
--Cholamandalam Invest Q1 loan against property disbursements INR 47.05 bln
--Cholamandalam Invest Q1 loan against property disbursements up 21% on year
--Cholamandalam Invest Q1 home loan disbursements INR 17.64 bln, dn 0.8% YoY
--Cholamandalam Invest Q1 net impairment INR 8.82 bln vs INR 5.81 bln yr ago
--Cholamandalam Invest: Board OKs issue of INR 550 bln of NCDs
By Aaryan Khanna
NEW DELHI – Cholamandalam Investment and Finance Co. Ltd. missed analyst estimates on its profit after tax for the June quarter as provisions rose and business growth stagnated. The company's asset quality worsened and expenses growth outpaced total income growth, continuing the trend for the 12th quarter in a row.
The non-banking finance company Thursday posted a net profit of INR 11.36 billion, up 20.6% on year but down over 10% sequentially. Its net profit was seen rising 30% on year to INR 12.26 billion in the reporting quarter, according to the average of estimates from 10 brokerages.
The lender's gross non-performing assets ratio stood at 4.29% as of Jun. 30, up from 3.97% a quarter ago. The net non-performing assets ratio rose to 2.86% at June-end, up from INR 2.63% on Mar. 31. Providing for the worsening loan book, net impairment on financial instruments for the June quarter zoomed over 50% on year to INR 8.82 billion and was also up 41% from the March quarter. However, the provision coverage ratio as per the Reserve Bank of India norms fell to 34.41% as on Jun. 30, down from 34.58% a quarter ago.
Shares of Cholamandalam Investment extended losses after the earnings, and slipped as much as 3.5% to INR 1,426.70 on the National Stock Exchange. On Thursday, the shares closed 2.4% lower at INR 1,443.20.
With the increase in impairment, an expense item, total expenses of the lender increased 27.2% on year to INR 58.01 billion in the June quarter. Employee benefit expenses grew 35% on year to INR 9.24 billion, in line with analyst expectations, as the lender continues to diversify its business and prepares to open 100 gold loan branches in the next few months.
The lender's net interest income - the interest income minus finance costs - rose 23.4% to INR 31.84 billion in the June quarter, according to a back-of-an-envelope calculation. The average of the 10 brokerages' estimates showed the figure at INR 33.67 billion in the reporting quarter. Total revenue from operations was up 25.2% on year at INR 72.45 billion.
Disbursements stagnated from the year-ago quarter, little changed at INR 243.25 billion in the June quarter. Consequently, Cholamandalam's once-industry-leading assets under management grew only 23% on year to INR 2.08 trillion, its slowest pace of loan book growth in at least two years. The rise was also at the lower end of analyst estimates.
The lender said it had taken a call to scale down its small and medium enterprises loan business where disbursements fell to INR 17.05 billion in Apr-Jun from INR 21.60 billion a year ago. "This is due to conscious call to slow down certain low ROTA (return on total assets) products in this segment," Cholamandalam said in a release. Moreover, consumer and small enterprise loans disbursed fell over 40% on year to INR 20.46 billion, with the company attributing the fall to exiting a partnership business in the segment.
Vehicle finance disbursements rose 7% on year to INR 136.47 billion, the largest segment of the lending portfolio. Disbursements in the loan against property business grew the fastest, at 21% on year to INR 47.05 billion. On the other hand, disbursements for home loans saw a marginal decline to INR 17.64 billion in the June quarter.
The gold loan business, which was launched in the June quarter, had disbursements worth INR 1 billion. Separately, the lender said its capital adequacy ratio was 19.96% at the end of June, against the regulatory requirement of 15%. Along with the earnings, the board on Thursday approved raising up to INR 550 billion through secured or unsecured non-convertible debentures in one or more tranches. End
Edited by Subhojit Sarkar
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