More Stories

Informist, Thursday, Nov. 6, 2025

By Aaryan Khanna

NEW DELHI – Cholamandalam Investment and Finance Co. Ltd.'s net profit for the September quarter was below the Street's expectations due to a rise in impairment costs and employee benefit expenses. The net interest income also missed estimates.

The non-banking finance company reported a net profit of INR 11.55 billion for the September quarter, up 1.7% sequentially and 20% on year. Analysts had expected the lender to post a net profit of INR 12.07 billion, according to the average of estimates from nine brokerages. Shares of Cholamandalam Investment extended losses to fall nearly 5.3% to an intraday low after the earnings were released, but recovered slightly to end at INR 1,683.40 on the National Stock Exchange Thursday, down 3.6%.

The company's net impairment of financial instruments, or provisions for bad loans, rose 44% on year to INR 8.97 billion in the September quarter. Meanwhile, employee benefit expenses rose by a third on year to INR 10.63 billion. This led total expenses growth to keep pace with growth in total income, both up nearly 21% on year.

The lender's net interest income – the difference between interest earned and expended – was INR 33.79 billion, against the average analyst estimate of INR 36.08 billion. The net interest income was up 25% on year and 6.1% on quarter.

Total income growth of 20.6% on year was boosted by other income of INR 1.21 billion, up more than 82% on year in Jul-Sept.

Total revenue from operations grew 20% on year to INR 74.70 billion in the September quarter. On the other hand, total expenses were up 20.7% on year at INR 60.29 billion. The rise in expenses was led by the two headline items, even as finance costs were up only 15.1% on year at INR 35.16 billion.

The rise in impairments coincided with a sharp deterioration in asset quality. The gross non-performing asset ratio rose to 4.57% as on Sept. 30 from 4.29% as on Jun. 30 and 3.78% a year ago, according to the Reserve Bank of India's classification norms, the lender said. The net NPA ratio rose to 3.07% at September-end from 2.86% a quarter ago and 2.48% as on Sept. 30 last year. The provision coverage ratio was 33.88%, against 34.41% as of June end. 

Cholamandalam Investment said that according to the Ind-AS accounting classification, its gross stage-3 asset ratio rose to 3.35% as of September-end from 3.16% a quarter ago and 2.83% a year ago. The net stage-3 asset ratio rose 13 basis points sequentially and 34 bps on year to 1.93% as of Sept. 30. Based on this calculation, the provision coverage ratio was 43.23%, marginally lower than 43.72% a quarter ago. 

Still, the lender reported a healthy capital adequacy ratio of 20% at the end of September, similar to a quarter ago and up from 19.50% a year ago. For the half-year ended September, the net profit was up over 20% on year at INR 22.91 billion. Total revenue from operations in the first six months of the financial year was up nearly 23% on year at INR 147.15 billion.

Disbursements stagnated from the year-ago quarter. They were up 1% at INR 244.42 billion in the September quarter. Consequently, the company's total assets under management grew only 21% on year to INR 2.15 trillion, its slowest pace of loan book growth in at least nine quarters. The company has guided for 20-25% assets under management growth in 2025-26 (Apr-Mar), after business AUM grew 27% on year in FY25. Its business AUM grew at the lower end of analyst expectations to INR 1.99 trillion as on Sept. 30, up 17% on year.

Vehicle finance disbursements, the largest segment of the lending portfolio, grew 10% on year to INR 135.39 billion. The assets under management in this segment rose 17% to INR 1.08 trillion as on Sept. 30, the lender said.

Disbursements in the loan against property business were more sluggish, at 8% on year to INR 46.30 billion. However, assets under management were up 33% on year at INR 463.02 billion at September-end. Disbursements for home loans saw a decline by 6.9% on year to INR 16.97 billion in the September quarter, though assets under management in this segment were also up 28% on year to INR 204.05 billion.

In the June quarter, the company said it had taken a call to scale down its small and medium enterprises loan business. The disbursement in the segment fell 19% on year to INR 15.81 billion in the reporting quarter, but the assets under management were up 28% on year at INR 75.44 billion as on Sept. 30. Consumer and small enterprise loans disbursed fell 40% on year to INR 21.42 billion, and the loan book contracted.  End

Edited by Nishant Maher and Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.