Chola Q1 profit contracts 24% to ₹327 crore

Cholamandalam Investment and Finance Co. Ltd (CIFCL), a Murugappa group firm, standalone net profit for Q1 FY22 contracted 24% to ₹326.80 crore as localised COVID-19-led lockdowns hampered the growth.

Disbursements rose marginally to ₹3,635 crore while Assets Under Management rose 7% to ₹75,763 crore. Total income grew by 17% to ₹2,467 crore and Net Income Margin by 39% to ₹1,363 crore, it said in a regulatory filing.

CIFCL’s Vehicle Finance business declined by 12% to ₹2,846 crore, Loan Against Property more than tripled to ₹386 crore and Home Loan saw 5% growth to ₹199 crore.

“Many of the borrowers and the staff of CIFCL were impacted by the pandemic in the second wave, whereby the priority shifted from business to protecting the well-being of the affected persons. This resulted in a setback in performance in Q1 on the disbursements and collections fronts,” CIFCL said in a statement.

The leading vehicle financing company said that during this period vehicle purchases were predominantly deferred. Collections also suffered, resulting in an increase in Stage 3 assets from 3.96% to 6.79% with a provision coverage of 35.51%. The total provisions currently carried against the overall book is 4.37% against the normal overall provision levels of 1.75%.

Stating that it was only a temporary phase, CIFCL expect the loan losses to get to normal levels in subsequent quarters as it happened in Q3 and Q4 of FY21 where the customers started paying up once the lockdown was lifted, and normalcy returned.

Capital Adequacy Ratio stood at 19.08% against the regulatory requirement of 15%, it added.

Our code of editorial values

This article is closed for comments.
Please Email the Editor

Printable version | Sep 23, 2021 6:36:58 PM |

Next Story