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Informist, Thursday, Jan. 29, 2026

By Shweta

MUMBAI - Cholamandalam Investment and Finance Co. Ltd. is likely to see a healthy double-digit on-year growth in its consolidated bottom line for the December quarter, according to brokerages tracking the company. The growth is due to higher net interest income, strong demand during festival, and the cuts in Goods and Services Tax.

The Chennai-headquartered lender's net profit for the December quarter is expected at INR 13.31 billion, up over 22% on year, according to the average of estimates from eight brokerages. The net profit was INR 10.87 billion in the year-ago quarter. The bottom line was INR 11.55 billion in the September quarter. The highest estimate for the company's net profit is INR 14.74 billion by Prabhudas Lilladher Pvt. Ltd., whereas the lowest estimate is INR 12.21 billion by ICICI Securities Ltd.

The net interest income – the interest earned minus interest expended – is likely to be INR 37.65 billion, according to the average of estimates. Estimates for the lender's net interest income reflect growth of over 30% on year and over 11% sequentially. The highest estimate for the lender's net interest income is INR 42.76 billion by Emkay Global Financial Services Ltd., whereas the lowest estimate is INR 35.22 billion by Kotak Securities Ltd.

The non-banking finance company's net interest margin is estimated at 7.0-8.3% for the December quarter, as per the average of six estimates. The highest estimate for the net interest margin is 8.3% by Elara Securities (India) Pvt. Ltd., whereas the lowest estimate is 7% by Motilal Oswal Financial Services Ltd. The net interest margin was 7.9% for the September quarter.

"NIMs are expected to expand on lower cost of funds, which will add up for profitability," Mirae Asset Sharekhan Ltd. said in a pre-earnings note. The Reserve Bank of India's Monetary Policy Committee had cut the RBI repo rate by 125 basis points between February and December 2025, which is expected to be reflected in lower borrowing costs in the December quarter.

Prabhudas Lilladher expects borrowings to be INR 2.08 trillion, whereas Nirmal Bang Equities Pvt. Ltd. expects borrowings to be INR 1.95 trillion for the December quarter. "Cost of borrowing has started to taper off in Q2 (September quarter) and we expect the movement to continue in Q3 (December quarter) with MCLR (marginal cost of funds based lending rate) repricing," Prabhudas Lilladher said in a note.

Cholamandalam's credit cost is likely to be 1.5-1.9% for the December quarter, according to five estimates. The highest estimate for credit cost is 1.9% from ICICI Securities Ltd., whereas the lowest estimate is 1.5% from Kotak Securities and Prabhudas Lilladher.

In the September quarter earnings analyst concall, the management had guided for its loan losses as a percentage of its assets to be 1.4-1.5% in 2025-26 (Apr-Mar), down from its earlier guidance of 1.3% and similar to the 1.4% reported in FY25.

ICICI Securities, Kotak Securities, and Motilal Oswal expect the non-banking finance company to make loan loss provisions of INR 7.82 billion-INR 9.43 billion for the December quarter. The highest estimate for provisions is INR 9.43 billion by ICICI Securities and the lowest estimate is INR 7.82 billion by Kotak Securities. The lender's loans and advances are likely to be nearly 30% higher on year at INR 2.24 trillion for the reporting quarter, according to Nirmal Bang.

The company's assets under management are estimated to grow 19-21% year-on-year to around INR 2.1 trillion at the end of the December quarter, according to the average of estimates from four brokerages. The company is likely to post a moderate 5% on-quarter growth in assets under management for the December quarter "on the back of 10% growth in disbursements...this reflects pick-up in across business lines post goods and services tax cut," Kotak Securities said in a pre-earnings note.

"Vehicle financiers are expected to enjoy benefits from the GST rate cuts as the sales of passenger vehicles is expected to push the AUM (assets under management)," Nirmal Bang said. The management has guided for loan book growth of 20-25% in FY26, down from 27% in FY25.

Cholamandalam Investment is a financial services provider offering vehicle finance, home loans, loan against property, small and medium enterprises loans, secured business personal loans, consumer & small enterprises loans, and loan against securities, among other financial services to customers.

The vehicle finance segment – which makes up about half of the company's loan portfolio – is expected to get a boost in profitability from the reduction in GST, strong demand during the festival season, and pent-up demand. Analysts will track the management's guidance on margins, loan growth, and asset quality of new businesses.

Shares of the non-banking finance company have fallen nearly 3% since its September quarter earnings were reported. The shares ended at INR 1,636.80 apiece on the National Stock Exchange on Wednesday, down 0.2%. The company will release its financial results for the December quarter Friday.

Of the nine brokerage reports on the company available with Informist, five have a 'buy' or equivalent rating on the stock with an average target price of INR 1,858 per share. This is over 13% higher than the current market price. Two brokerages have a 'hold' rating on the stock with an average target price of INR 1,734 per share, while two have a 'sell' rating on the stock with an average target price of INR 1,654 per share.

Following are the December quarter earnings estimates for Cholamandalam Investment and Finance Co. from eight brokerages in descending order of the estimate of net profit in INR billion:

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Edited by Avishek Dutta

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