Business

Chola’s Q3 profit surges 28%

Board approves ₹300 crore preferential issue to parent

Cholamandalam Investment and Finance Company Ltd. (Chola), a Murugappa Group firm, has posted a 28% increase in its standalone net profit for the third quarter ended December 2019 to ₹388.51 crore despite the prevailing tough market conditions.

“Faced with a slowdown in the auto sector, we changed our product mix to shore up our net interest income. Accordingly, we were able to grow our assets under management (AUM) by over 25% and net profit by over 28%,” Arun Alagappan, MD, Cholamandalam Investment and Finance Company, said. He added that Chola continued to maintain strong asset quality with a marginal increase in (stage 3) receivables to 3.5%, with a provision coverage of 33%.

During the period under review, total income of the company grew 25% to ₹2,275 crore and net income margin grew 24% to ₹1,083 crore, the company said in a regulatory filing.

Aggregate disbursements for the third quarter stood at ₹7,475 crore against ₹7,644 crore.

Due to a contraction in commercial vehicle sector, disbursements in the segment slipped to ₹5,949 crore from ₹6,277 crore.

The company disbursed ₹908 crore against ₹954 crore in the home equity business. The AUM grew 25% to ₹65,992 crore. CIFCL’s capital adequacy ratio stood at 17.04%. The board on Thursday appointed Ravindra Kumar Kundu, president and business head, vehicle finance, as executive director for a period of five years with immediate effect.He has been with CIFCL since 2000 and has an overall experience of 30 years.

The board also approved the issue of preferential shares to its promoter entity, Cholamandalam Financial Holdings Ltd., for an amount not exceeding ₹300 crore in one or more tranches, subject to various regulatory approvals.

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Printable version | Jul 11, 2020 4:55:04 AM | https://www.thehindu.com/business/cholas-q3-profit-surges-28/article30636746.ece

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