Cholamandalam Investment and Finance Company reported 24% drop on standalone net profit to Rs 327 crore on a 17% rise in total income to Rs 2,467 crore in Q1 FY22 over Q1 FY21.
Profit before tax in Q1 FY22 stood at Rs 441 crore, down by 24% from Rs 581 crore in Q1 FY21.
PROP (pre-provision operating profit) increased by 56% to Rs 993 crore in Q1 FY22 from Rs 637 crore in Q1 FY21.
Net income margin rose 39% to Rs 1,363 crore in Q1 FY22 from Rs 983 crore in Q1 FY21.
Aggregate disbursements in Q1 FY22 were at Rs 3,635 crore as against Rs 3,589 in Q1 FY21, growth of 1%, localized lockdown imposition in various states had hampered the growth in Q1 FY22.
Vehicle Finance (VF) business disbursed of Rs 2,846 crore in Q1 FY22 as against Rs 3,231 in Q1 FY21, registering a decline of 12%.
Loan Against Property (LAP) business disbursed Rs 386 crore in Q1 FY22, as against Rs 119 crore in Q1 FY 21, with a good growth rate of 225%. Previous year Q1 quarter LAP disbursements was heavily disrupted due to COVID first lock-down.
Home Loan (HL) business disbursed Rs 199 crore in Q1 FY22, as against Rs 190 crore in Q1 FY21 registering a growth rate of 5%.
Assets under management as at end of June 2021, grew by 7% at Rs 75,763 crore as compared to Rs 70,826 crore as at end of June 2020.
The company continues to hold strong liquidity position with Rs 7,917 crore as cash balance as at end of June 2021 (including Rs 1,500 crore invested in G-sec shown under investments), with a total liquidity position of Rs 16,417 crore (including undrawn sanctioned lines). The ALM is comfortable with no negative cumulative mismatches across all time buckets.
Cholamandalam Investment and Finance Company (CICFL) said that pursuant to the second wave of the COVID pandemic, localized lockdowns were imposed by various states starting mid-April 2021 which extended in most states till mid-June 2021 and in some states partial lockdowns are still in force.
This resulted in a setback in performance in Q1 on the disbursements and collections front. Disbursements were up by 1% as compared to Q1 of FY 21, as purchase of vehicles were predominantly deferred. Collections also suffered, resulting in increase in Stage 3 assets from 3.96% to 6.79%.
The restructuring option with asset classification benefit extended by RBI under Restructuring 2.0 was used to the extent of 3.86% of the book as of June 2021. Total restructuring (including the restructuring done under Restructuring 1.0) stood at 5.44% of the book. These loans are classified as Stage 2 assets as a matter of prudence.
CIFCL held management overlay provisions of Rs 750 crore as on December 2020 and created additional overlay provisions in March 2021 to the tune of Rs 350 crore to support possible uncertainties that could arise due to the second wave, taking the total management overlay to Rs 1,100 crore. Of this, management overlay of Rs 400 crore was reversed during the quarter ended June 2021.
Post this reversal of Rs 400 crore, CIFCL still maintains a management overlay of Rs 700 crore in Stage 2 and Stage 3 to manage any future contingencies.
Chola has witnessed a recovery in disbursements and collections during the latter part of June 2021, post relaxation of state wise lockdowns. The company expects a gradual revival in subsequent quarters in FY22 with normalization and rollbacks of accounts which moved to higher buckets.
Cholamandalam Investment and Finance Company, the financial services arm of Murugappa Group, is a diversified non-banking finance company engaged in providing vehicle finance, home loans and corporate mortgage loans, small and medium enterprises (SME) loans, investment advisory services, stock broking and a range of other financial services.
The scrip surged 10.32% to currently trade at Rs 525.10 on the BSE. On the BSE, over 12.35 lakh shares of the company were traded in the counter so far as against an average trading volume of 4.28 lakh shares in the past two weeks.
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