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Cholamandalam Investment and Finance Co. is a prominent Non-Banking Financial Company (NBFC) based in India.
With a market capitalization of Rs. 122,531.2 Crores, the company operates primarily in vehicle financing, offering loans for various types of vehicles including commercial vehicles, passenger cars, two- and three-wheelers, and tractors. Additionally, they provide loans for construction equipment, secured loans against property, and home and SME loans. Their offerings extend to personal loans, professional loans, and business loans tailored for salaried professionals, self-employed individuals, and small enterprises.
Beyond lending, Cholamandalam also provides a range of financial services including:
Their service portfolio includes dealer portal services under the Gaadi Bazaar brand, that connects vehicle dealers for listings, leads, and loan applications. Furthermore, they operate Payswiff, an omni-channel payment solution that enables businesses to accept payments through multiple channels including in-store, online, and on-the-go with mPOS and POS solutions.
Founded in 1978 and headquartered in Chennai, India, Cholamandalam has demonstrated solid financial performance. With a trailing 12-month revenue of Rs. 24,515 Crores and profit of Rs. 4,068.4 Crores over the past four quarters, the company has shown impressive revenue growth of 144.8% in the last three years.
Cholamandalam also distributes dividends to its investors, boasting a dividend yield of 0.14% per year, with a recent payout of Rs. 2 per share. However, the company has diluted shareholder holdings by 2.4% over the past three years, indicating a strategic shift in share distribution.
Summary of Cholamandalam Investment and Finance Co.'s latest earnings call, featuring management's outlook on business performance, financial results, and analyst Q&A sessions that highlight key strategic initiatives and market challenges.
Last updated: Feb 25
The management of Cholamandalam Investment and Finance Company outlined the following outlook and key points during the Q3 FY25 earnings call:
Growth & Performance:
Asset Quality:
Margins & Liquidity:
Capital & Dividend:
Key Risks:
Management remains confident in achieving growth targets while managing asset quality and margins, with FY26 credit costs expected to improve YoY.
Last updated: Feb 25
Question 1: Dhaval Gada (DSP)
"Last quarter, we commented that generally, we expect Stage 3 assets to improve in the second half. If you look at Slide 29, the improvement is less, with increases in newer businesses. Could you discuss whether this is in line with expectations and if Q4 will see improvement? Additionally, for CSEL and SME (Slides 67-68), what are the steady-state credit costs?"
Answer: Stage 3 increased due to higher NCLs in CSEL's partnership portfolio (to be phased out by FY26) and delayed SME resolutions via SARFAESI. SME credit costs should stabilize at 0.5% long-term. CSEL's credit costs will decline as partnerships wind down. Asset quality will improve gradually, with Q4 likely better but slower than past years.
Question 2: Dhaval Gada (DSP) "“ Follow-up
"On growth, last time you mentioned 25% medium-term growth. Does this hold for next year?"
Answer: The 25% AUM growth target remains unchanged for FY26, supported by diversified segments like vehicle finance, LAP, and home loans.
Question 3: Dhaval Gala (Aditya Birla Sun Life AMC)
"What is the outlook on NIMs amid rate cycles, and should Q4 asset quality follow historical seasonal improvements?"
Answer: Borrowing costs lag rate cuts by a quarter. Q4 asset quality will improve but less sharply than previous years due to macro challenges (e.g., lower capacity utilization). Vehicle finance NCLs are stabilizing, with resolution progress expected in 3"“4 quarters.
Question 4: Akshay Jain (Autonomous Research)
"Why are credit costs elevated (~155"“160 bps)? Is stress in vehicle finance widespread? Also, clarify SBPL's performance."
Answer: Higher credit costs stem from LAP/Housing normalization (reversals ending) and stressed segments (SCV, tractors). SBPL's steady-state NCL is 1.5"“2%, with ROA at 6%. Vehicle finance stress is product-specific (SCV/used CV improving since Nov'24). GNPA diverges from Stage 3 due to partial recoveries.
Question 5: Harshit Toshniwal (Premji Invest)
"How has headcount shifted toward collections, and will cost ratios remain elevated?"
Answer: 55% of recent hires are in collections, with 31,000 dedicated to recovery. Productivity dipped due to lower disbursements, but cost ratios will stabilize as new businesses mature.
Question 6: Raghav Garg (Ambit Capital)
"What drives LAP's NPL increase, and what's the credit cost guidance for FY26?"
Answer: LAP NPLs are stable (Stage 3 at 2.25%); fluctuations reflect normal roll-forwards. FY26 credit costs will decline YoY, led by vehicle finance improvement. CSEL's partnership disbursements (Rs.1,200Cr in Q3) will phase out.
Question 7: Abhijit Tibrewal (Motilal Oswal)
"Why the 3"“4 quarter timeline for credit cost normalization? Is macro recovery needed?"
Answer: Heavy CV stress (tied to GDP/IIP) requires broader economic recovery, while SCV/LCV improvements are gradual. Vehicle finance NCLs will decline from Q4 but normalize fully in 3"“4 quarters.
Question 8: Pranuj (JPMorgan)
"Why are LAP disbursements slowing, and can Home Loans sustain 16% yields amid growth?"
Answer: LAP disbursements dipped due to procedural delays but will recover. Home Loans target 15% disbursement/30% AUM growth via pan-India expansion, with yields stable via operational efficiency.
Question 9: Hardik Shah (Goldman Sachs)
"How much of LAP is repo-linked, and what's the transmission lag if rates fall?"
Answer: LAP pricing follows internal benchmarks tied to borrowing costs. Transmission lags depend on bank MCLR adjustments, likely 1"“2 quarters.
Question 10: Subramanian Iyer (Morgan Stanley)
"Clarify the Rs.65Cr gain from derecognition and FLDG accounting."
Answer: The gain reflects portfolio assignment to a bank. FLDG income (1% of CSEL's ECL) is booked in other income, inflating reported NCLs.
Question 11: Piran Engineer (CLSA)
"What are LAP/Home Loan growth targets, and how are used car delinquencies trending?"
Answer: LAP targets 25% disbursement/35"“40% AUM growth; Home Loans aim for 30% AUM growth. Used car delinquencies are improving, with no systemic stress.
Question 12: Chandra (Fidelity)
"Why the 3"“4 quarter credit cost lag despite improving early delinquencies? What's the opex outlook?"
Answer: Existing Stage 3 cases require time for resolution (cash flow recovery). Opex/asset (3%) will stay elevated due to growth investments but stabilize post-FY26.
Question 13: Vikram Subramanian (Marshall Wace)
"Why no sharp Q4 credit cost decline despite utilization recovery?"
Answer: Stage 3 customers need sustained repayment capability, which lags utilization improvements. Opex will stay flat near-term but decline as collection hiring stabilizes.
Question 14: Renish Bhuva (ICICI Securities)
"Why rising vehicle finance opex (3.4% vs. 2.8% in Q1'24)?"
Answer: Higher collection hires and lower sales productivity (due to SCV/LCV stress) drove opex up. Efficiency gains from stabilized manpower will reduce opex from FY26.
Question 15: Kunal Shah (Citi)
"How sustain 25% AUM growth amid slower disbursements?"
Answer: Disbursement run rates (18%) and portfolio tenure (e.g., Home Loans) support AUM growth. Vehicle finance opex will ease as collection hiring plateaus.
Analysis of Cholamandalam Investment and Finance Co.'s financial performance, highlighting revenue trends, growth patterns, and key metrics through quarterly analysis.
Last Updated: Mar 31, 2025
| Description | Share | Value |
|---|---|---|
| Vehicle Finance | 53.2% | 3.8 kCr |
| Loan against property | 18.3% | 1.3 kCr |
| Others | 15.3% | 1.1 kCr |
| Home Loans | 9.8% | 699.8 Cr |
| Unallocated | 3.3% | 239 Cr |
| Total | 7.1 kCr |
Buy Backs: Company has bought back it's stock in the past which is a good thing.
Smart Money: Smart money has been increasing their position in the stock.
Profitability: Very strong Profitability. One year profit margin are 17%.
Technicals: Bullish SharesGuru indicator.
Growth: Awesome revenue growth! Revenue grew 38.1% over last year and 144.8% in last three years on TTM basis.
Size: It is among the top 200 market size companies of india.
No major cons observed.
Comprehensive comparison against sector averages
CHOLAFIN metrics compared to Finance
| Category | CHOLAFIN | Finance |
|---|---|---|
| PE | 31.9 | 30.5 |
| PS | 5.29 | 6.71 |
| Growth | 38.1 % | 10.8 % |
CHOLAFIN vs Finance (2021 - 2025)
Understand Cholamandalam Investment and Finance Co. ownership landscape with insights into key distribution patterns, offering investors a clear view of stakeholder dynamics.
| Shareholder Name | Holding % |
|---|---|
| Cholamandalam Financial Holdings Limited (Formerly TIFinancial Holdings Ltd) | 44.34% |
| Ambadi Investments Limited (formerly Ambadi Investments Private Limited) | 4.01% |
| AXIS MUTUAL FUND TRUSTEE LIMITED A/C AXIS MUTUAL FUND | 2.39% |
| NEW WORLD FUND INC | 1.86% |
| SBI MUTUAL FUND | 1.62% |
| SMALLCAP WORLD FUND, INC | 1.31% |
| HDFC MUTUAL FUND | 1.25% |
| ADITYA BIRLA SUN LIFE TRUSTEE PRIVATE LIMITED | 1.02% |
| M.A.Alagappan | 0.3% |
| Shambho Trust (M V Subbiah & S Vellayan,Trustees holds shares for Trust) | 0.18% |
| M V AR Meenakshi | 0.1% |
| Arun Alagappan | 0.1% |
| Saraswathi Trust (M V Subbiah, S Vellayan & M V Seetha Subbiah, Trustees holds shares for Trust) | 0.09% |
| Lakshmi Ramaswamy Family Trust(A A Alagammai & Lakshmi Ramaswamy Trustees holds shares for Trust) | 0.07% |
| AR Lakshmi Achi Trust | 0.06% |
| Arun Venkatachalam | 0.05% |
| Pranav Alagappan | 0.04% |
| M.A.Alagappan (Holds shares in the capacity of Partner of Kadamane Estates - Firm) | 0.04% |
| V Arunachalam | 0.03% |
| V Narayanan | 0.03% |
Distribution across major stakeholders
Distribution across major institutional holders
Investor Care | |
|---|---|
| Dividend Yield | 0.13% |
| Dividend/Share (TTM) | 2 |
| Shares Dilution (1Y) | 0.13% |
| Diluted EPS (TTM) | 48.3 |
Financial Health | |
|---|---|
| Debt/Equity | 0.00 |
| Debt/Cashflow | 0.00 |
Valuation | |
|---|---|
| Market Cap | 1.3 LCr |
| Price/Earnings (Trailing) | 31.9 |
| Price/Sales (Trailing) | 5.29 |
| EV/EBITDA | 7.44 |
| Price/Free Cashflow | -2.75 |
| MarketCap/EBT | 23.72 |
Fundamentals | |
|---|---|
| Revenue (TTM) | 24.52 kCr |
| Rev. Growth (Yr) | 35.25% |
| Rev. Growth (Qtr) | 8.14% |
| Earnings (TTM) | 4.07 kCr |
| Earnings Growth (Yr) | 24.79% |
| Earnings Growth (Qtr) | 12.44% |
Profitability | |
|---|---|
| Operating Margin | 22.32% |
| EBT Margin | 22.32% |
| Return on Equity | 19% |
| Return on Assets | 2.24% |
| Free Cashflow Yield | -36.3% |
Detailed comparison of Cholamandalam Investment and Finance Co. against industry peers, highlighting key financial metrics, valuation ratios, and performance indicators to provide competitive context within the sector.
Ticker | Name | Mkt Cap | Revenue | Price %, 1M | Returns, 1Y | P/E | P/S | Rev 1-Yr | Inc 1-Yr |
|---|---|---|---|---|---|---|---|---|---|
| BAJFINANCE | Bajaj FinanceNon Banking Financial Company(NBFC) | 5.64 LCr | 66.19 kCr | +2.77% | +24.91% | 35.12 | 8.52 | +28.74% | +16.50% |
| SUNDARMFIN | SUNDARAM FINANCENon Banking Financial Company(NBFC) | 58.63 kCr | 8.42 kCr | +9.19% | +10.27% | 32.59 | 6.96 | +26.24% | -4.24% |
| M&MFIN | Mahindra & Mahindra Financial ServicesNon Banking Financial Company(NBFC) | 32.69 kCr | 17.97 kCr | -7.87% | +2.66% | 13.21 | 1.82 | +18.41% | +27.11% |
Updated Apr 28, 2025
Shares of Cholamandalam Investment fell by 4% after CLSA downgraded the stock to 'Hold' with a price target of ₹1,600.
The stock is trading at a high price-to-book value, typically seen only during periods of strong growth, which is not the case currently.
Cholamandalam's recent price fluctuations include a one-day performance drop of 1% and trading near its day's low.
Cholamandalam Investment & Finance Company has shown impressive long-term growth, with a five-year performance of 1066.7%.
Despite the downgrade, 27 out of 40 analysts still maintain a 'Buy' rating on the stock, reflecting overall confidence in its potential.
Cholamandalam's stock has seen a substantial three-month increase of 26.77%, showcasing resilience in the market.
This information is AI-generated and may contain inaccuracies. Please verify from multiple sources.