Cholamandalam Investment and Finance Company

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Aug 03, 2020 09:08 IST capital market

Cholamandalam Investment and Finance Company reported strong 37% surge in the consolidated net profit to Rs 431.30 crore in the quarter ended June 2020 (Q1FY2021). The income from operations increased 8% to Rs 2071.14 crore for the quarter ended June 2020, while other income of the company declined 59% to Rs 54.47 crore. The total income increased 4% to Rs 2125.61 crore for quarter ended June 2020.

Interest expenses rose 4% to Rs 1130.57 crore. Operating expenses declined 3% to Rs 331.28 crore, allowing the gross profits to surge 7% at Rs 663.76 crore. Depreciation rose 6% to Rs 25.65 crore, while provisions and write-offs dipped 49% to Rs 56.13 crore. Profit before tax moved up 20% yoy basis at Rs 581.98 crore for quarter ended June 2020.

Effective tax rate declined to 25.9% in quarter ended June 2020 compared with 35.0% in the corresponding quarter of previous year. Net Profit of the company improved 37% to Rs 431.30 crore for quarter ended June 2020.

Business performance

Aggregate disbursements for the quarter ended June 20 were at Rs 3589 crore as against Rs 8572 crore in the previous year registering a decline of 58%. Disbursements started to pick up after lockdown relaxation post 15 May.

Vehicle Finance (VF) business has clocked a volume of Rs 3231 crore for the quarter ended June 2020 as against Rs 6940 crore in the previous year, reporting a decline of 53%. The disbursements were predominantly in Tractors, Two-wheelers, construction equipment and Used business segments.

Loan Against Property (LAP) business disbursed Rs 119 crore as against Rs 1101 crore in the previous year, registering a decline of 89%.

Home Loan (HL) business disbursed Rs 190 crore as against Rs 420 crore in the previous year, registering a decline of 55%.

Assets under management grew by 13% at Rs 70826 crore as compared to Rs 63827 crore for the same quarter in FY20.

PBT-ROA for the quarter was at 3.6% as against 3.4% in the same quarter in FY20.

ROE for the quarter ended June 2020 was at 20.6% as against 20.0% in the same quarter previous year

Asset Quality

The asset quality as on 30 June 2020 represented by Stage 3 assets stood at 3.3% with a provision coverage of 41.6%, as against 3.0% in Q1 of FY20 with a provision coverage of 36.2%.

The Stage 3 assets have improved from 3.8% in March 2020 to 3.3% in June 2020. The total additional provision carried for Covid and Macro is now Rs 551 crore as against Rs.534 crore as of March 2020.

Pursuant to the moratorium announced by RBI on EMI repayments, the company has granted moratorium to its customers for installments falling due between March and August. Nearly 74% of customers have availed moratorium considering the uncertainty over the period of lockdown. However, post relaxations of lock down after 15 May, the company witnessed traction with respect to collections from such moratorium availed customers, who have started paying their EMIs in advance. Around 50% of moratorium customers have paid partial or full installments.

The company has not availed moratorium so far on its borrowings. The company holds strong liquidity position with Rs 7169 crore as cash balance as of June 2020 with a total liquidity position of Rs 11677 crore (including undrawn sanctioned lines). The ALM is comfortable with no negative cumulative mismatches across all time buckets. Even after extending the moratorium to its customers, for the second phase, the cash position of the Company is adequate to meet all its maturities and fixed obligations till December 2020.

Capital Adequacy:

The Capital Adequacy Ratio (CAR) of the company as on 30 June 2020 was at 20.42% (As per Ind AS) as against the regulatory requirement of 15%.

Book value per share of the company stood at Rs 526.32 per share at end June 2020. The adjusted book value accounting for NNPA stood at Rs 440.65 per share at end June 2020.

Financial Performance FY2020

For the year ended March 2020 (FY2020), the company reported 24% increase in its income from operations to Rs 8124.65 crore compared to corresponding previous year period, while other income of the company increased 10% to Rs 587.98 crore. Total income moved up 23% to Rs 8712.63 crore. Interest expenses increased 28% to Rs 4591.7 crore. Operating expenses galloped 15% to Rs 1524.53 crore. Gross profits increased 18% at Rs 2596.4 crore in FY2020. Depreciation jumped 95% to Rs 111.25 crore. Provisions and write-offs zoomed 188% to Rs 897.35 crore. PBT declined 13% to Rs 1587.8 crore. Effective tax rate was lower at 33.64% compared to 34.65% in the corresponding previous year quarter. Net Profit of the company declined 12% to Rs 1053.72 crore in FY2020.

Cholamandalam Investment and Finance Company: Consolidated Results

 

Particulars 1912 (3) 1812 (3) Var % 2003 (12) 1903 (12) Var %
Income from operations 2046.37 1772.42 15 8124.65 6576.22 24
Other Income 119.20 130.14 -8 587.98 532.61 10
Total Income 2165.57 1902.56 14 8712.63 7108.83 23
Interest Expenses 1135.46 986.13 15 4591.70 3588.14 28
Other expenses 388.38 380.50 2 1524.53 1321.18 15
Gross profit 641.73 535.93 20 2596.40 2199.51 18
Depreciation 27.79 15.56 79 111.25 56.99 95
Profit before tax and Provisions 613.94 520.37 18 2485.15 2142.52 16
Provisions and write off 556.70 55.62 901 897.35 311.34 188
Profit before tax 57.24 464.75 -88 1587.80 1831.18 -13
Provision for tax 14.79 166.68 -91 534.08 634.59 -16
PAT 42.45 298.07 -86 1053.72 1196.59 -12
Minority Interest 0.00 0.00 - 0.00 -1.47 -
Net Profit 42.45 298.07 -86 1053.72 1198.06 -12
EPS*(Rs) 2.07 14.54 12.85 14.61
* Annualized on current equity of Rs 163.99 crore. Face Value: Rs 2, Figures in Rs crore, Figures as per Ind AS
Source: Capitaline Corporate Database

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