Cholamandalam Investment Q3 Results Review - Strong AUM Growth; NIMs Stable: IDBI Capital

IDBI Capital Report

Cholamandalam Investment and Finance Company Ltd.’s assets under management growth picked up further to 31% YoY versus 25% YoY (Q2 FY23) led by strong growth in disbursements (up 38% YoY). Management revised guidance to 27-30% AUM growth for FY23.

Asset quality improved with gross stage-III at 3.51% versus 3.84% led by better collection efficiency. Also, gross non-performing asset (as per Reserve Bank of India norms) stood at 5.4% versus 5.8%; it remains high.

Management overlay provisions stood at Rs 5 billion (0.5% of AUM) which should support credit cost going forward.

Net interest income grew by 8% QoQ led by stable net interest margins; pre-provision operating profit grew by 4% QoQ led by increase in operating expenses (up 14% QoQ). However, profit after tax grew by 22% QoQ led by decline in provisions (down 43% QoQ).

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