Cholamandalam Investment and Finance Company Ltd
NSE:CHOLAFIN
Cholamandalam Investment and Finance Company Ltd
Cholamandalam Investment and Finance Company Ltd. (Chola) is a compelling narrative rooted in the sprawling landscape of India’s dynamic financial industry. Established in 1978 as part of the Murugappa Group, a diversified conglomerate, Chola has grown to become a towering figure in the non-banking financial company (NBFC) sector. Initially, the company positioned itself as a financier for vehicle loans, but it soon expanded its horizons to tap into a variety of financial services. The journey from solely offering vehicle finance to now covering home loans, SME loans, and even wealth management reflects Chola’s relentless adaptability to evolving market needs. Their core approach effectively combines a robust rural presence with urban operations, enabling them to cater to a wide array of financial requirements across distinct consumer segments.
Chola's revenue machine operates through a well-oiled model of diversification, which allows them to mitigate risks while capitalizing on India's rapid economic growth. A significant portion of their profitability is derived from vehicle loans, particularly for commercial vehicles and tractors, catering to India's burgeoning road transport sectors and agriculture. By also delving into home equity loans and affordable housing finance, Chola aligns itself with the rising momentum in India’s real estate and housing markets. This diversification is not random but strategically aligns with sectors that are keystones of the Indian economy, ensuring steady demand. Their income streams are bolstered by the careful underwriting of loans and astute risk management, ensuring that the company's asset quality remains robust even amidst the volatile Indian economic environment. This intricate dance of adaptability and strategic foresight characterizes Chola’s enduring success in the financial services arena.
Cholamandalam Investment and Finance Company Ltd. (Chola) is a compelling narrative rooted in the sprawling landscape of India’s dynamic financial industry. Established in 1978 as part of the Murugappa Group, a diversified conglomerate, Chola has grown to become a towering figure in the non-banking financial company (NBFC) sector. Initially, the company positioned itself as a financier for vehicle loans, but it soon expanded its horizons to tap into a variety of financial services. The journey from solely offering vehicle finance to now covering home loans, SME loans, and even wealth management reflects Chola’s relentless adaptability to evolving market needs. Their core approach effectively combines a robust rural presence with urban operations, enabling them to cater to a wide array of financial requirements across distinct consumer segments.
Chola's revenue machine operates through a well-oiled model of diversification, which allows them to mitigate risks while capitalizing on India's rapid economic growth. A significant portion of their profitability is derived from vehicle loans, particularly for commercial vehicles and tractors, catering to India's burgeoning road transport sectors and agriculture. By also delving into home equity loans and affordable housing finance, Chola aligns itself with the rising momentum in India’s real estate and housing markets. This diversification is not random but strategically aligns with sectors that are keystones of the Indian economy, ensuring steady demand. Their income streams are bolstered by the careful underwriting of loans and astute risk management, ensuring that the company's asset quality remains robust even amidst the volatile Indian economic environment. This intricate dance of adaptability and strategic foresight characterizes Chola’s enduring success in the financial services arena.
Disbursement Growth: Disbursements rose to INR 29,962 crores in Q3 FY26, up 16% year-on-year, with strong momentum across all major segments.
AUM Expansion: Assets under management grew 20% year-on-year, reaching INR 227,770 crores.
Vehicle Finance: Vehicle finance disbursements grew 17% year-on-year; credit costs remain elevated but are stabilizing, with improvement expected in Q4.
Margins & NIM: Net interest margin improved by 33 bps compared to last year, helped by lower cost of funds; operating expenses remained steady.
Asset Quality: Stage 2 and early defaults are declining across products, indicating better collections; asset quality in vehicle finance remains under close watch but is showing signs of improvement.
Credit Costs: Home loans saw a one-off credit cost spike due to ARC sale; CSEL and SBPL credit costs are expected to improve from Q4 onwards.
Market Share Gains: The company gained market share across key OEMs in vehicle finance, with growth outpacing the market in several segments.
Guidance: Management expects Q4 performance to be better than Q3, with AUM growth guidance at 20–22% and NIM expected to hold steady.
