Cholamandalam Profit Jumps 41% to 1,630 Crore Rupees, Plans 5,000 Crore Raise
Key Facts
Cholamandalam Investment and Finance Company’s net profit rose 41% to 1,630 crore rupees in the quarter ended September 2026, as income, assets and credit disbursements grew, according to The Economic Times. In a parallel move, the board approved a proposal on October 28 to raise up to 5,000 crore rupees through a qualified institutional placement. Management expects the capital raise to take place over the next six to nine months. The results came as the company expanded its lending activity across vehicle, real estate and small and medium-sized enterprise finance. Company data also showed improvement in some asset-quality and return-on-equity measures during the quarter and first half of fiscal 2027.
Assets under management rose 25% year on year to 2.68 lakh crore rupees in the quarter, while total credit disbursements increased 47% to 35,872 crore rupees, according to The Economic Times. For the first half of fiscal 2027, credit disbursements reached 65,484 crore rupees, up 34% from the year-earlier period, according to the company’s investor presentation. Net income for the quarter was 5,037 crore rupees, compared with 4,075 crore rupees a year earlier, a rise of 24%. Loan losses fell 3% to 874 crore rupees, while total expenses increased 22% to 1,975 crore rupees. The figures combine expanding activity and improved income with expenses rising faster than net income.
Quarterly profit before tax rose 40% to 2,188 crore rupees, and total income increased 23% to 9,367 crore rupees, according to The Economic Times. Finance costs also rose 23% to 4,329 crore rupees, alongside growth in total income. Net interest margin stood at 7.9% in the second quarter. Management told analysts after the results were announced that it expects the cost of funds to rise by 10 to 15 basis points year on year in the next quarter. The company’s borrowing structure leaves it exposed to changes in funding costs: about half of its borrowings carry floating rates, while the rest are linked to banks’ marginal cost of funds-based lending rates. Total borrowings stood at 2.31 lakh crore rupees at the end of September 2026.
Vehicle finance drove a significant part of activity, with its portfolio growing 21% to 1.30 lakh crore rupees and disbursements in the business reaching 17,801 crore rupees during the quarter, according to The Economic Times. The loan-against-property portfolio rose 24% to 57,447 crore rupees. The small and medium-sized enterprise loan portfolio also increased 45% to 10,943 crore rupees. The results reflect growth across multiple portfolios alongside the increase in total credit disbursements. In the first half of fiscal 2027, profit before tax rose 43% to 4,409 crore rupees from 3,090 crore rupees in the corresponding period of the previous fiscal year, according to the investor presentation.
The company reported a return on equity of 19.4% in the second quarter of fiscal 2027, up from 18.1% in the corresponding period of fiscal 2026. For the first half, return on equity improved to 20.3% from 18.5% a year earlier, according to the investor presentation. Stage 3 assets, measured by loans overdue by 90 days, declined to 3.25% in the second quarter from 3.35% in the corresponding period. Capital adequacy stood at 20.62%, including 16.02% in Tier 1 capital. These indicators come as the company proposes to raise up to 5,000 crore rupees in new capital, targeting a six-to-nine-month period following the board’s approval on October 28.
The company added gold loans to its growth drivers after launching the business in 2026, and its assets under management reached 3,446 crore rupees during the quarter, according to The Economic Times. The business accounted for 5% of total credit disbursements and operated through 308 branches. The investor presentation said the number of gold-loan branches stood at 308 at the end of September 2026. The business adds to the vehicle, real estate and small and medium-sized enterprise portfolios, as credit disbursements rose 47% during the quarter. Management expects the cost of funds to rise by 10 to 15 basis points annually in the next quarter, while it plans to raise capital over the next six to nine months.