Cholamandalam Financial Holdings profit before tax declines 25.8%

Cholamandalam Financial Holdings Ltd, which holds 45.50 per cent stake in Cholamandalam Investment and Finance Company, has registered a decline of 25.8 per cent in profit before tax of Rs 26.16 crore during the quarter which ended March 31, 2020, as compared to Rs 35.26 crore in the same period of previous financial year. The total income declined 21.4 per cent to Rs 28.66 crore in comparison to Rs 36.47 crore of income generated in the corresponding quarter of last year.

For the year 2019-20, the profit before tax declined 15.4 per cent at Rs 1,806.89 crore compared to Rs 2,135.90 crore during the previous year. The total income grew 20 per cent to Rs 13,135.73 crore as compared to Rs 10,946.81 crore during 2018-19. Drop in profit after tax, to Rs 1,165.05 crore as compared to Rs 1,414.83 crore, during the previous financial year, is due to one time impairment provision of Rs 504 crore on loans to cover contingencies due to Covid-19 and  related macro economic conditions and remeasurement of deferred tax asset consequent to reduction in Income Tax Rate during the year.

Cholamandalam Investment & Finance Company Ltd, disbursed Rs 29,091 crore for the year ended March 31, 2020 compared to Rs 30,451 crore in the previous year. Disbursements which were already registering a slow growth till December 19 (9 per cent growth YTD December) suffered resulting in a drop of 4 per cent for the year over FY19. Total assets under management grew by 16% at Rs. 66,943 crore as compared to Rs.57,560 crore in FY19.

Cholamandalam MS General Insurance Company Ltd, a subsidiary in general insurance business, in which the company holds about 60 per cent stake, registered a Gross Written Premium (GWP) of Rs 4,824 crore during the year as against Rs 4,552 crore in FY19, a growth of six per cent.  Profit after tax for the year was at Rs 125 crore as against Rs 198 crore in FY19. Drop in Profit after tax is on account of remeasurement of deferred tax asset consequent to reduction in Income Tax Rate for the year, said the company.

Cholamandalam MS Risk Services Ltd., a Joint Venture company, in which the company holds 49.5 per cent stake, registered a revenue of Rs 46.29 crore for the year as against Rs 40.82 crore in FY19. Profit after tax for the year was at Rs 4.09 crore as against Rs 3.53 crore in FY 19.