Cholamandalam Investment and Finance Company Ltd: Q1 Financial Insights
Strong Profit Growth Amidst Flat Disbursements
Cholamandalam Investment and Finance Company Ltd. has reported noteworthy financial results for the first quarter of FY2025-26, marking a robust 21% increase in consolidated net profit. The profit surged to ₹1,136 crore, up from ₹942 crore in the same quarter last year. This growth reflects the company’s resilience in a competitive market, even as their aggregate disbursements remained almost unchanged.
Rising Net Income
The company’s net income also saw an impressive rise, climbing 27% to ₹3,864 crore in the April-June quarter of 2025, an increase from ₹3,033 crore the previous year. This jump in net income indicates that Cholamandalam is effectively managing its operations and optimizing revenue streams amidst a challenging economic backdrop.
Asset Under Management Growth
In terms of scale, the financial services arm of the Murugappa Group reported a notable increase in its Assets Under Management (AUM), which grew by 23% to reach ₹2,07,663 crore as of June 30, 2025. This growth signals strong client confidence and a solid investment strategy, as Cholamandalam continues to expand its footprint in various financial sectors.
Flat Disbursements with Sector Variations
Interestingly, the company’s aggregate disbursement figures reflected minimal change, totaling ₹24,325 crore in FY2025-26, compared to ₹24,332 crore in the same period last year. However, there were notable variations between sectors, which paint a more nuanced picture of the company’s performance.
Vehicle Finance Sector Gains
One of the standout performers was the vehicle finance segment, which experienced a growth of 7%. Disbursements rose to ₹13,647 crore in April-June 2025 from ₹12,766 crore a year prior. This increase can be attributed to rising demand in the automobile sector as consumer preferences shift towards mobility solutions.
Growth in Loans Against Property
The Loan Against Property (LAP) business also demonstrated healthy performance, with disbursements climbing 21% to ₹4,705 crore from ₹3,874 crore the previous year. This growth indicates a rising appetite among clients for leveraging their property assets.
Home Loans and SMEs Face Challenges
On the flip side, the home loans disbursement slightly declined to ₹1,764 crore from ₹1,778 crore. This reduction underscores the volatility in the real estate market and the nuanced challenges that may be affecting customer confidence in long-term borrowing.
Similarly, the Small and Medium Enterprises (SME) loan portfolio saw a drop, with disbursements falling to ₹1,705 crore compared to ₹2,160 crore last year. The company mentioned a strategic choice to slow down on certain low return-on-assets products within this sector, highlighting a tactical shift in focus to more profitable ventures.
Changes in Consumer and Small Enterprise Loans
Cholamandalam’s segment for consumer and small enterprise loans reported a significant decline in disbursements. The figures fell to ₹2,046 crore from ₹3,486 crore due to the company’s decision to exit specific partnership business models. This strategic exit is aimed at streamlining operations and focusing on higher-value offerings.
New Ventures Seeing Promise
Amidst these fluctuations, the company saw promising growth in its secured business and personal loans, recording a 34% increase in disbursements to ₹359 crore from ₹268 crore. Additionally, the newly launched gold loan business achieved disbursements of ₹100 crore—a positive sign of diversification in Cholamandalam’s financial service offerings.
Robust Capital Adequacy
Lastly, Cholamandalam’s financial health remains solid, with a capital adequacy ratio (CAR) of 19.96% as of June 30, 2025. This score not only exceeds the regulatory requirement of 15% but also reinforces the company’s capability to withstand market fluctuations.
In essence, Cholamandalam Investment and Finance Company Ltd. continues to navigate the complexities of the financial landscape with notable agility, reflecting both its growth potential and strategic focus on profitability amidst diverse market conditions.
