Financial Insights

Cholamandalam Investment and Finance: Ready for next leg of growth

Chola’s excellent control over credit cost in Q2 led to a 40 percent growth in profit after tax at Rs 607 crore

Provisions were 82 percent lower at Rs 58 crore as there was no Covid-related requirement. The management expects provisions to follow a similar trajectory in the second half of FY22, assuming there is no further pandemic-led shock.

The NIM improved by 40 basis points (bps) year on year (YoY) to 7.7 percent, while the cost of funds fell by 20 bps sequentially to 5.9 percent. CIFC continues to maintain a strong liquidity position of Rs 5,389 crore (including current investments) and undrawn sanctioned lines of about Rs 4,400 crore.

A part of the Murugappa group of companies, CIFC started its operations as an equipment finance company and later diversified into vehicle finance, loan against property (LAP), MSME lending, and home loans (HL). As of 2QFY22, CIFC has a total AUM of Rs 70,023 crore, the bulk of which comprises the vehicle finance book.

However, the other segments are picking up fast. The NBFC operates 1140 branches across 29 states/Union territories with about 81 percent being in tier III-VI cities.

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