This article first appeared on GuruFocus .
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Aggregate Disbursements:INR24,442 crores.
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Assets Under Management (AUM):INR2,14,906 crores, 21% growth year-on-year.
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Vehicle Finance AUM Growth:17%.
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Loan Against Property (LAP) AUM Growth:33%.
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Home Loans AUM Growth:28%.
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SME AUM Growth:28%.
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Net Interest Margin (NIM):Improved from 7.5% to 7.9%.
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Profit Before Tax (PBT):INR1,561 crores, 20% growth year-on-year.
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PBT Return on Assets (ROA):3%.
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Return on Equity (ROE) for Q2:18.11%.
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Return on Equity (ROE) for H1:18.47%.
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Total Liquid Assets:INR17,516 crores.
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Capital Adequacy Ratio:20% with Tier 1 at 14.59%.
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Warning! GuruFocus has detected 7 Warning Signs with BOM:511243.
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Is BOM:511243 fairly valued? Test your thesis with our free DCF calculator.
Release Date: November 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Cholamandalam Investment and Finance Co Ltd ( BOM:511243 ) reported a 21% year-on-year growth in assets under management (AUM), reaching INR 2,14,906 crores.
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The company's net interest margin (NIM) improved from 7.5% to 7.9% during the quarter, with expectations of further improvement in the second half of the year.
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The vehicle finance segment registered a 17% growth in AUM, while the loan against property (LAP) segment grew by 33%.
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The company holds a strong liquidity position with total liquid assets of INR 17,516 crores and a capital adequacy ratio of 20%.
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Cholamandalam Investment and Finance Co Ltd ( BOM:511243 ) expects stronger growth and profitability in the second half of the fiscal year, driven by improved disbursement growth and favorable market conditions.
Negative Points
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Home loans disbursement was negative in the quarter due to procedural changes in registration processes in key markets.
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The consumer and small enterprise loan (CSEL) business experienced a decline due to the cessation of disbursements through fintech partnerships.
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Higher delinquencies were observed in the unsecured business loans portfolio under CSEL, particularly in certain markets.
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The company expressed concerns about the extended monsoon and its potential impact on agricultural harvests, which could affect future performance.
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Stage 3 numbers increased across all product segments, indicating some stress in asset quality.
Q & A Highlights
Q: Can you provide insights on the expected growth in disbursements and AUM for the second half of FY26? A: Vellayan Subbiah, Executive Chairman, stated that while the first half saw flat disbursement growth, the second half is expected to be stronger. Factors such as delayed registrations due to festive holidays and the positive impact of GST cuts are anticipated to boost growth. Although achieving a 10% disbursement growth might be challenging, AUM growth of over 20% is not at risk.
Q: What is the outlook on credit costs, especially concerning the CSEL business? A: Vellayan Subbiah mentioned that credit costs in the CSEL business have peaked and are expected to moderate. The company has tightened underwriting norms and improved borrower monitoring. Overall, credit costs are expected to improve in the second half, with a focus on stabilizing Stage 2 and Stage 3 assets.
Q: How are vehicle finance segments performing, and what impact do extended monsoons have? A: The Executive Chairman noted that while there has been some stress in vehicle finance due to monsoons affecting capacity utilization, Stage 2 assets have remained stable. Improvement is expected in Q3 and Q4 as capacity utilization increases. The company is closely monitoring the impact of extended monsoons on the third quarter.
Q: Can you elaborate on the challenges and strategies for the CSEL business? A: Vellayan Subbiah explained that the CSEL business faced challenges due to partner selection issues and a lack of control over processes. The company is now focusing on maintaining control over origination, underwriting, and collections. The strategy involves building collection strength and tightening underwriting to mitigate risks.
Q: What are the trends in vehicle utilization and the impact of GST cuts on vehicle finance? A: Vehicle utilization has been improving since the festival season, with further improvements expected from December. The GST cuts have positively impacted sentiment, and the company anticipates increased vehicle purchases post-harvest and improved capacity utilization, particularly in light and small commercial vehicles.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
