Money & Banking

Cholamandalam Investment and Finance Q1 profit falls 24%

Our Bureau Chennai | Updated on July 30, 2021

‘Faces setback in performance on the disbursements and collections front’

Cholamandalam Investment and Finance Company, on Friday, reported a 24 per cent decline in standalone net profit for the first quarter at ₹326.80 crore.

The Murugappa Group company reported a standalone net profit at ₹430.93 crore during corresponding quarter in the previous year.

The lender said many of its borrowers and staff were impacted by the second wave of the pandemic.

“This resulted in a setback in performance in Q1 on the disbursements and collections front. Collections also suffered, resulting in an increase in Stage 3 assets from 3.96 per cent to 6.79 per cent,” it added.

The restructuring option (with asset classification benefit extended by the RBI under Restructuring 2.0) stood at 3.86 per cent of the book as of June 2021.

“Chola has witnessed a recovery in disbursements and collections during the latter part of June 2021, post-relaxation of State-wise lockdowns. We expect a gradual revival in subsequent quarters in FY22 with normalisation and rollbacks of accounts, which moved to higher buckets,” said the company.

Total income on a standalone basis grew to ₹2,467 crore (₹2,114 crore) during Q1 FY22.

Disbursements on a year-on-year basis grew by 1 per cent to ₹3,635 crore (₹3,589 crore) during the June quarter affected by localised lockdown due to the second wave of Covid-19. The total AUM of the lender grew by 7 per cent year-on-year to ₹75,763 crore (₹70,826 crore) as of June 2021.

The company continues to hold a strong liquidity position with ₹7,917 crore as cash balance as of June 2021, with a total liquidity position of ₹16,417 crore (including undrawn sanctioned lines), says a release.

Published on July 30, 2021

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