Cholamandalam Investment and Finance Company (511243) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 disbursements were ₹24,325 crore, with AUM growing 24% year-on-year to ₹2,07,663 crore, supported by gold loan business launch and branch expansion.

• Net income for Q1 FY26 rose 21% year-on-year to ₹1,136 crore; PBT up 21% to ₹1,530 crore; PAT at ₹1,137.83 crore.

• Asset quality saw some stress, with stage three assets rising to 3.16% and GNPA at 4.29%, mainly due to early monsoon, lower vehicle utilization, and revised RBI norms.

• Net interest margin improved to 7.8% from 7.6% year-on-year, and OpEx ratio reduced to 2.9%.

• Branch network expanded to 1,703 locations, with 88% in Tier-III to Tier-VI towns; customer base reached 42.6 lakh.

Financial highlights

• Q1 FY26 income increased 26% year-on-year to ₹7,331 crore; consolidated total income at ₹7,353.09 crore.

• Net credit losses rose 52% year-on-year to ₹882 crore; expense ratio at 2.9%.

• Provision coverage on stage three assets stood at 43.72%.

• Capital adequacy ratio was 19.96%, with tier one capital at 14.31%.

• Total liquid assets were ₹17,226 crore, with a liquidity coverage ratio of 204.64%.

Outlook and guidance

• Credit cost guidance for FY26 is 1.4%-1.5% of total assets, with improvement expected from Q3 onwards if monsoon and macro conditions stabilize.

• Asset growth is targeted at 20%-22%, with vehicle finance expected at 17%-18% and mortgage businesses at 30%.

• Home loan book growth expected at 20-22% in FY26, with stable asset quality.

• Management remains cautious but optimistic about recovery in H2, contingent on rural and industrial economic improvement.

• Used vehicle and tractor segments forecasted to maintain positive momentum; LAP portfolio to grow 21-23% in FY26.