Chennai, NFAPost: Cholamandalam Investment and Finance Company Limited (CIFCL or Chola), the financial services arm of the Murugappa Group, profit after tax (PAT) came down by 24% to Rs 327 crore in Q1 FY22 compared with Rs 431 crore in the same period in the fiscal 2021.
In a statement, CIFCL said many of the borrowers and the staff of CIFCL were impacted by the pandemic in the 2nd wave, whereby the priority shifted from business to protecting the wellbeing of the affected persons.
“This resulted in a setback in performance in Q1 on the disbursements and collections front. Disbursements were up by 1% as compared to Q1 of FY 21, as purchase of vehicles were predominantly deferred. Collections also suffered, resulting in increase in Stage 3 assets from 3.96% to 6.79%,” states CIFCL.
· Disbursements at 3635 crs was marginally higher than Q1 FY 21.
· Total AUM at ₹ 75,763 Cr (Up 7% YoY)
· Net Income Margin at ₹ 1,363 Cr (Up 39% YoY) for Q1 FY22
· Pre-Provision Operating Profit (PPOP) at 993 crs registering a growth of 56%
CIFCL asset quality as at end of June 2021, represented by Gross Stage 3 assets stood at 6.79% with a provision coverage of 35.51%, as against 3.34% as at end of June 2020 with a provision coverage of 41.62%.
The total provisions currently carried against the overall book is 4.37% as against the normal overall provision levels of 1.75% carried prior to the Covid-19 pandemic.
The company availed restructuring option with asset classification benefit extended by RBI under “Restructuring 2.0” was used to the extent of 3.86% of the book as of Jun21. Total restructuring (including the restructuring done under “Restructuring 1.0”) stood at 5.44% of the book. These loans are classified as Stage 2 assets as a matter of prudence.
·Aggregate disbursements in Q1 FY 22 were at ₹ 3,635 Cr as against ₹ 3,589 in Q1 FY 21, growth of 1%, localized lockdown imposition in various states had hampered the growth in Q1 FY 22.
·Vehicle Finance (VF) business disbursed of ₹ 2,846 Cr in Q1 FY 22 as against ₹ 3,231 in Q1 FY21, registering a decline of 12%.
·Loan Against Property (LAP) business disbursed ₹ 386 Cr in Q1 FY 22, as against ₹ 119 Cr in Q1 FY 21, with a good growth rate of 225%. Previous year Q1 quarter LAP Disbursements was heavily disrupted due to Covid first lock-down.
·Home Loan (HL) business disbursed ₹ 199 Cr in Q1 FY 22, as against ₹ 190 Cr in Q1 FY 21 registering a growth rate of 5%.
·Assets under management as at end of June 2021, grew by 7% at ₹ 75,763 Cr as compared to ₹ 70,826 Cr as at end of June 2020.
·Profits after Tax (PAT) for Q1 FY 22 were at ₹ 327 Cr compared to ₹ 431 Cr in Q1 FY 21, registering a decline of 24%.
·PBT-ROA for Q1 FY 22 was at 2.5% as against 3.5% in previous year quarter Q1 FY 21.
·ROE for the quarter ended June 21 was at 13.5% as against 20.6% in previous year.
·The Company continues to hold strong liquidity position with ₹ 7,917 Cr as cash balance as at end of June 21 (including Rs 1500 Cr invested in Gsec shown under investments), with a total liquidity position of ₹16,417 Cr (including undrawn sanctioned lines). The ALM is comfortable with no negative cumulative mismatches across all time buckets.
CIFCL asset quality as at end of June 2021, represented by Gross Stage 3 assets stood at 6.79% with a provision coverage of 35.51%, as against 3.34% as at end of June 2020 with a provision coverage of 41.62%.
The total provisions currently carried against the overall book is 4.37% as against the normal overall provision levels of 1.75% carried prior to the Covid-19 pandemic.
Cholamandalam Investment and Finance Company Limited (Chola), incorporated in 1978 as the financial services arm of the Murugappa Group. Chola commenced business as an equipment financing company and has today emerged as a comprehensive financial services provider offering vehicle finance, home loans, home equity loans, SME loans, investment advisory services, stock broking and a variety of other financial services to customers.
Chola operates from 1137 branches across India with assets under management above Rs 75,000 Crores. The mission of Chola is to enable customers enter a better life. Chola has a growing clientele of over 16 lakh happy customers across the nation
