Cholamandalam Financial Holdings held its analyst and investor conference call for the fourth quarter of the fiscal year 2026 on May 8, 2026. The management, led by Non-Executive Director Mr. Sridharan Rangarajan and other senior executives, provided a detailed overview of the company's performance, with a specific focus on Chola MS General Insurance.

Financial Performance Overview

For the quarter ended March 2026, Chola MS recorded a Gross Direct Premium Income (GDPI) of INR2,048 crores, while the GDPI for the full year stood at INR7,762 crores. The company reported that the loss of crop insurance business due to re-tendering impacted the GDPI by INR124 crores in Q4 and over INR590 crores for the year. Including reinsurance inward business, the Gross Written Premium (GWP) was INR2,349 crores for Q4 and INR8,904 crores for the full year.

The Profit Before Tax (PBT) for the year was INR454 crores, which included provisions for labor code-related gratuity and mark-to-market impairment on equity investments. The return on equity (ROE) for the year on average net worth was 10.4%, with a 3-year average ROE peaking at approximately 14.4%.

Key Operational Metrics

The company's expense of management (EOM) for the full year was 30.46%, which measures 29.12% without the 1/n effect. The claims ratio for Q4 and the year was reported at 81.3%, higher than the corresponding periods of the previous year. This increase was attributed to competitive intensity in the industry and rising severity in court awards for third-party claims.

Consequently, the combined ratio for the year was 115.2%, or 112.2% excluding the 1/n effect. The management noted that the combined ratio includes the impact of augmented motor third-party reserving. The solvency ratio was recorded at 1.96x.

Strategic Outlook and Future Plans

During the Q&A session, management addressed the decline in direct premium, noting that the loss of crop insurance business was a significant factor. The company intends to participate in crop business tenders across states in the upcoming cycle to recover lost market share. Regarding the motor business, the company has adopted a cautious stance on the 2-wheeler segment due to the absence of motor third-party premium increases over the last four years.

The management indicated that the motor own-damage (OD) loss ratio has seen a delta of about 10%, which is an area of focus for correction. Over the last 2 to 3 months, the company has observed a 7% to 8% improvement in price realization, which is expected to help reduce the motor OD loss ratio over the next six months. The company aims to achieve an ROE of around 15% in the medium to long term.

Accounting Transition and Leadership Change

The Board has decided to seek forbearance for transitioning statutory accounting to Ind AS from April 1, 2027, to ensure a calibrated transition. It was noted that there would be a significant drop in the combined ratio in the year of adoption, which is expected to level out over subsequent years.

Additionally, the call marked the introduction of Mr. Rajive Kumaraswami as the Managing Director Designate of Chola MS General Insurance. He is set to take over from Mr. V. Suryanarayanan effective June 1, 2026.

Cholamandalam Financial Holdings (CFHL) has reported its audited financial results for the quarter and year ended March 31, 2026. The Board of Directors approved the results at their meeting held on May 8, 2026. On a consolidated basis, total income for the year ended March 31, 2026 stood at ₹39,576 Cr, compared to ₹33,460 Cr in the corresponding period of the previous year, registering a growth of 18%. Consolidated profit after tax (PAT) for the full year rose 16% to ₹5,485 Cr from ₹4,740 Cr in the prior year. The statutory auditors, M/s. R.G.N. Price & Co., Chartered Accountants, have issued an unmodified opinion on both the standalone and consolidated financial results.

Consolidated Financial Performance

For the quarter ended March 31, 2026, consolidated total income was ₹10,520 Cr as against ₹9,009 Cr in the corresponding quarter of the previous year, a growth of 17%. Consolidated PAT for the quarter was ₹1,626 Cr compared to ₹1,362 Cr in the same quarter of the previous year, registering a growth of 19%. The following table summarises the key consolidated financial metrics on a year-on-year basis:

Standalone Financial Performance

On a standalone basis, total income for the quarter ended March 31, 2026 was ₹52.38 Cr as against ₹51.53 Cr in the corresponding quarter of the previous year. Standalone PAT for the quarter was ₹38.48 Cr compared to ₹37.60 Cr in the same quarter of the previous year. For the full year, standalone total income was ₹89.79 Cr against ₹86.20 Cr, and standalone PAT was ₹70.41 Cr against ₹64.40 Cr in the prior year.

Subsidiary and Joint Venture Performance

Cholamandalam Investment & Finance Company Ltd (CIFCL), in which CFHL holds approximately 43.76% stake, disbursed ₹32,913 Cr in Q4 FY26 as against ₹26,417 Cr in Q4 FY25, a growth of 25%. CIFCL's PAT for the quarter was ₹1,641 Cr compared to ₹1,267 Cr in the corresponding quarter of the previous year, a growth of 30%. For the full year, CIFCL's PAT was ₹5,220 Cr compared to ₹4,259 Cr in the prior year, a growth of 23%. Assets under management grew 21% to ₹2,42,630 Cr as at March 31, 2026 from ₹1,99,876 Cr as at March 31, 2025.

Segment-wise, CIFCL's Vehicle Finance disbursements grew by 26% in Q4 FY26 to ₹18,132 Cr. Assets under management for this segment grew by 18% YoY. Loan losses were at 1.6% in Q4 FY26 compared to 1.2% in Q4 FY25. Profit before tax for Vehicle Finance grew by 18% in Q4 FY26 to ₹1,067 Cr. The Loan Against Property segment saw disbursements grow by 5% in Q4 FY26 to ₹5,838 Cr, with AUM growing by 26% YoY. Profit before tax for this segment rose by 45% in Q4 FY26 to ₹522 Cr. The Home Loans segment reported disbursements of ₹1,895 Cr in Q4 FY26, with AUM growing by 23% YoY and profit before tax increasing by 21% to ₹239 Cr.

Cholamandalam MS General Insurance Company Ltd (CMSGICL), a subsidiary in which CFHL holds approximately 60% stake, registered a Gross Written Premium (GWP) of ₹2,398 Cr in Q4 FY26 against ₹2,224 Cr in the corresponding period of the previous year, a growth of 8%. For the full year, GWP was ₹9,110 Cr against ₹8,564 Cr in the previous year, a growth of 6%. PAT (under Ind AS) for the year ended March 31, 2026 was ₹253 Cr as against ₹484 Cr in the corresponding period of the previous year. CMSGICL has an investment book of ₹19,013 Cr as of March 31, 2026. For the quarter ended March 31, 2026, CMSGICL incurred a loss of ₹5 Cr as against a profit of ₹118 Cr in the corresponding quarter of the previous year, on account of fair value change in equity.

Cholamandalam MS Risk Services Ltd, a joint venture in which CFHL holds 49.5% stake, registered total income of ₹28.98 Cr for the quarter ended March 31, 2026 against ₹24.79 Cr in the corresponding quarter of the previous year. PAT for the quarter was ₹3.55 Cr compared to ₹3.63 Cr in the same period of the previous year. For the full year, total income was ₹98.78 Cr against ₹83.20 Cr, and PAT was ₹7.73 Cr against ₹7.07 Cr.

Key Management Personnel Changes

The Board also announced a transition in key managerial personnel. Mr. N Ganesh has tendered his resignation from the position of Chief Financial Officer of the Company, effective close of business hours on June 14, 2026. Mr. Ganesh, who also served as the Manager of the Company, completes his third term of three years in that capacity on the same date, having been re-appointed effective June 15, 2023, and having served a total of nine years as Manager. He has stated that his decision is purely professional in nature and that there is no other material reason associated with the same.

Based on the recommendation of the Nomination and Remuneration Committee, Mr. Shyam Shankar has been appointed as both the Chief Financial Officer and Manager of the Company, effective June 15, 2026. His appointment as Manager is for a period of five years, subject to shareholders' approval. Mr. Shyam Shankar is a qualified Chartered Accountant and Cost Accountant with over 20 years of experience in senior finance roles within regulated financial services environments, bringing expertise in financial reporting oversight, audit governance, internal financial controls, and investor communication.

Dividend and AGM

The Board of Directors has recommended a final dividend of 130%, being ₹1.30 per equity share of face value of ₹1/- each, for the year ended March 31, 2026, subject to shareholders' approval at the ensuing Annual General Meeting (AGM). The record date for the purpose of the AGM and payment of dividend has been fixed as Friday, August 7, 2026. The 77th AGM is scheduled to be held on Friday, August 14, 2026. The dividend will be paid to shareholders within 30 days from the date of the AGM.