More Stories

Informist, Monday, Jul. 27, 2026

By Kabir Sharma

MUMBAI – Cholamandalam Investment and Finance Co. Ltd. is expected to report a jump in its net profit for the June quarter, with strong loan growth across its diversified lending businesses likely to offset the pressure from higher funding costs and moderating margins. While analysts broadly expect the non-banking finance company to continue delivering robust growth in assets under management, the focus during the earnings announcement will be on trends in net interest margin, credit costs, asset quality, and the management's outlook for the rest of the financial year.

The company is expected to report net interest income of INR 42.06 billion for the quarter, up 32% on year and 9% on quarter, according to the average of estimates from 13 brokerages. The net profit is estimated at INR 15.52 billion, up 37% on year, although it is expected to decline 5.4% sequentially owing to higher operating expenses and elevated credit costs.

The highest estimate for the company's net interest income is INR 47.59 billion from YES Securities (India) Ltd. and the lowest is INR 39.47 billion from Prabhudas Lilladher Pvt. Ltd. The highest net profit estimate is INR 16.87 billion from IDBI Capital Market Services Ltd. and the lowest is INR 14.42 billion from Nomura Equity Research.

Another quarter of strong expansion in its loan book is expected to be a key driver of earnings for Cholamandalam Investment. Most brokerages expect assets under management to grow around 20-22% from a year ago, supported by healthy disbursement trends across vehicle finance, small and medium enterprise lending, gold loans, and digital lending. IDBI Capital expects assets under management to rise 20%. Kotak Securities Ltd. estimates assets under management to increase 22% on the back of 26% growth in disbursements.

Vehicle finance is expected to remain a major contributor to business expansion, while the company continues to benefit from increasing diversification into newer lending segments. PhillipCapital (India) Pvt. Ltd. believes the loan book will continue to grow at more than 20% year-on-year, aided by favourable conditions in commercial vehicle finance. Prabhudas Lilladher expects housing loans and loan against property to remain key growth drivers even as a rise in fuel costs could have some impact on overall business momentum.

Despite healthy business growth, Cholamandalam Investment's margin performance is likely to remain under pressure because of elevated funding costs. Kotak expects spreads to remain at around 7.2%, marginally higher than the previous quarter, suggesting that the company has been able to preserve pricing despite a competitive lending environment. However, other brokerages expect some moderation in profitability metrics. Motilal Oswal Financial Services Ltd. expects margins to decline by about 10 basis points sequentially to around 7%, while Nomura forecasts 29 bps contraction in the net interest margin due to a 16 bps increase in the cost of funds. Prabhudas Lilladher expects higher yields from new businesses to be offset by a rise in funding costs.

Funding costs and the company's ability to defend lending spreads will, therefore, be among the most closely watched factors during the earnings announcement. Investors will also look for the management's commentary on whether the recent easing in interest rates translates into lower borrowing costs over the coming quarters.

Cholamandalam Investment's credit quality is expected to remain healthy, although analysts foresee some moderation in credit costs compared with earlier expectations. IDBI Capital expects credit costs to moderate towards 1.5%, supported by continued improvement in stage-III assets and healthy capitalisation. Kotak Securities estimates credit costs at around 1.8% for the quarter, compared with 1.6% for the preceding quarter, while Motilal Oswal expects credit costs to increase to about 1.75%. Nomura also anticipates higher credit costs during the quarter, whereas Prabhudas Lilladher believes it should moderate over time.

Stable asset quality remains another important theme across brokerages' expectations. PhillipCapital expects asset quality to remain broadly stable, while IDBI Capital expects continued improvement. Investors will closely monitor the management's commentary on delinquency trends across vehicle finance, micro, small and medium enterprise lending, and newer retail businesses, especially after the rapid expansion over the past few years.

Analysts are likely to seek updates on loan demand across commercial vehicles, passenger vehicles, housing finance, loan against property, gold loans, and digital lending, along with commentary on the sustainability of strong disbursement growth. The trajectory of funding costs, margin recovery, and credit cost normalisation will also be important indicators for the remainder of the financial year.

Cholamandalam Investment will detail its June quarter earnings on Tuesday. On Friday, its shares closed at INR 1724.4 on the National Stock Exchange, up 0.4% from Thursday. The stock is down 3% since the company detailed its March quarter results on May 8.

Of the 12 btokerage reports on the company available with Informist, eight have a "buy" rating on the stock at an average target price of INR 1,874 per share. This is nearly 9% higher than the current market price. Three brokerages have a "hold" recommendation at an average target price of INR 1,720 per share, while one brokerage has a "sell" rating on the stock.

Following are the June quarter earnings estimates for Cholamandalam from 13 brokerages, in descending order of the estimate of net profit, in INR billion:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Shubhayan Bhattacharya

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. 2026. All rights reserved.