Cholamandalam Investment and Finance Q4 PAT at Rs690 crore

6 May 2022 , 10:30 AM

The Board of Directors of  Cholamandalam Investment and Finance announced the audited financial results for the quarter and financial year ended 31^st March 2022.

Highlights:
The impact of third wave on the Indian economy turned out to be muted than the previous two waves. Nationwide rapid vaccination coverage contributed to blunting the impact of Omicron and boosting consumer confidence and business optimism. The company had delivered its best-ever disbursals, collections, and profitability in Q4 FY22. The stellar performance was aided by strong signs of recovery in both Auto and Mortgage Industry. All major CV OEMs reported double digit growth in March’22 aided by pick up in infra projects, growth in logistics and e-commerce sector coupled with easing of finance option. Strong rebound in residential housing sales in the current quarter was aided by demand from consumers after deferral of home buying due to Covid19.     

Highlights:

• Aggregate disbursements in Q4 FY 22 were at Rs 12,718 crore as against Rs 8,071 crore in Q4 FY 21 with a growth of 58%.  Disbursements for FY 22 were at Rs 35,490 crore as against Rs 26,043 crore in the previous year registering the growth of 36% Y-on-Y.
• Vehicle Finance (VF) disbursements were at Rs 8,785 crore in Q4 FY 22 as against Rs 6,153 crore in Q4 FY21, growth of 43%.  Disbursements for FY 22, were at Rs 25,439 crore as against Rs 20,249 crore in the previous year, reporting a growth of 26% Y-o-Y.
•  Loan Against Property including Affordable LAP, business disbursed Rs 1,978 crore in Q4 FY 22, as against Rs 1,191 crore in Q4 FY 21, with a growth rate of 66%. The Disbursements for FY 22 were at Rs 5,862 crore as against Rs 3,627 crore in the previous year, registering a good growth rate of 62% Y-o-Y.
•  Home Loan (HL) business disbursed Rs 441 crore in Q4 FY 22, as against Rs 538 crore in Q4 FY 21. The Disbursements for FY 22 were at Rs 1,571 crore as against Rs 1,542 crore in the previous year.
• New businesses Consumer and Small Enterprise Loans (CSEL), Secured Business and Personal Loans (SBPL) launched last year and along with Small and Medium Enterprises Loans business made disbursals of Rs 1515 crore in Q4 of FY 22 which is a growth of 702% and Rs 2619 crore in the full year, which is a growth of 319% YoY.
• Assets under management as of 31^st March 2022, stood at Rs 82,904 crore as compared to Rs 76,518 crore as of 31^st March 2021.
• Profits after Tax (PAT) for Q4 FY 22 were at Rs 690 crore compared to Rs 243 crore in Q4 FY 21, reporting a growth of 184%. PAT for FY 21-22, were at Rs 2,147 crore as against Rs 1,515 crore in the same period last year registering a growth of 42%.
• PBT-ROA for Q4 FY 22 was at 4.8% and for FY 21-22 was at 3.9% as against 1.8% and 3.0% respectively in the same period last year.
• ROE for Q4 FY 22 was at 24.6% as against 10.4% in previous year.
• The Company continues to hold a strong liquidity position with Rs 5,341 crore as cash balance as at end of March 2022 (including Rs 1500 crore invested in Gsec shown under investments), with a total liquidity position of Rs 13,246 crore (including undrawn sanctioned lines).  The ALM is comfortable with no negative cumulative mismatches across all time buckets.

 
Dividend:
The Board of Directors of the company has recommended a dividend of Rs 0.70 per share (35%) on the equity shares of the company, subject to the approval of the members of the company at the ensuing Annual General Meeting. This is in addition to the interim dividend of Rs 1.30 per share (65%) for the financial year 2021-22 declared by the company on 1^st February 2022.
 
Asset Quality
Adoption of RBI circular on revised NPA norms
RBI had issued a circular in Nov 21 directing NBFC to adopt a tighter provisioning norm and accordingly, from 1^st November 2021 onwards we have started tracking daily DPD and for agreements which crossed 90 DPD we continued to classify them as NPA until all dues towards principal and interest are collected in full.  RBI had issued a clarificatory circular on February 15^th, 2022, deferring the implementation date to September 30th, 2022. However, on a conservative note, we propose to early adopt these norms under IRAC.
The ECL model provisions this year is stress tested with the impact of Covid being built into the PD and LGD computations and hence the ECL model provisions across stages had increased over Dec-21.  Apart from this, we had also factored in a write-off of Rs 190 crore for long overdue accounts where further recovery is expected to be minimal.  Towards these a part of the management overlay amounting to Rs 336 crore was utilised and the Management overlay provisions carried in books as of Mar’22 stands at Rs 500 crore. 
 
CIFCL asset quality as at end of March 2022, represented by Stage 3 assets stood at 4.37% with a provision coverage of 39.67%, as against 5.85% as at end of December 2021 with a provision coverage of 38.80%. The total provisions currently carried against the overall book is 3.04% as against the normal overall provision levels of 1.75% carried prior to the Covid-19 pandemic.
 
As per revised RBI norms (circular dated Nov 12^th, 2021) GNPA% and NNPA% as of March 2022 is at 6.82% and 4.75% respectively. We carry Rs 564 crore higher provisions under INDAS over IRAC.
 
The details of the stagewise assets and provisions are given in the annexure.
 
Capital Adequacy:
 
The Capital Adequacy Ratio (CAR) of the company as on 31^st March 2022, was at 19.6% as against the regulatory requirement of 15%. Tier-I Capital was at 16.5%.
 
Subsidiaries’ / Associate’s / JV’s Performance
Revenue from Cholamandalam Securities Limited business for the year FY 22 is Rs 40.12 crore and from the Cholamandalam Home Finance Limited is Rs 55 crore. Net Revenues from two new investments, Payswiff Technologies Private Limited and Paytail Commerce Private Limited is Rs 49.3 crore and Rs 1.5 crore respectively for the FY 22.