Cholamandalam Q4FY26 Earnings: Disbursements Up 25% YoY, AUM at ₹2,42,630 Crores
Cholamandalam Investment and Finance Company reported strong Q4 FY26 performance with disbursements of ₹32,913 crores (25% YoY growth) and AUM of ₹2,42,630 crores (21% YoY). ROA improved to 4.1% before a precautionary ₹200 crore management overlay. Management guided FY27 AUM growth of 20%–23%, net credit cost of ~1.5%, and pre-tax ROTA of ~3.5%, supported by broad-based growth across Vehicle Finance, MSME, and Consumer segments.
*this image is generated using AI for illustrative purposes only.
Cholamandalam Investment and Finance Company Limited has released the transcript of its Q4 FY26 earnings conference call held on 4 May 2026, following the earlier upload of the audio recording on the same date. The transcript has been uploaded on the company's official investor relations page in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and was communicated to the stock exchanges on 11 May 2026. The disclosure was signed by P Sujatha, Company Secretary.
Q4 FY26 Financial Performance
Executive Chairman Vellayan Subbiah opened the call by highlighting broad-based growth across all business segments. The company reported aggregate disbursements of ₹32,913 crores in Q4 FY26, representing 25% year-on-year growth, while Assets Under Management (AUM) rose to ₹2,42,630 crores, reflecting 21% year-on-year growth. Net Interest Margins (NIMs) improved by 40 basis points year-on-year, driven by a gradual reduction in the cost of funds as interest rates softened. Credit costs (before management overlay) declined by 20 basis points year-on-year. Return on Assets for Q4 FY26 stood at 4.1% (before overlay), compared to 3.6% in Q4 FY25, while Return on Equity for the quarter was 23%.
The key financial and operational highlights are summarised below:
| Metric: | Q4 FY26 | Q4 FY25 |
|---|---|---|
| Aggregate Disbursements: | ₹32,913 crores | — |
| Disbursement Growth (YoY): | 25% | — |
| AUM: | ₹2,42,630 crores | — |
| AUM Growth (YoY): | 21% | — |
| NIM Improvement (YoY): | +40 bps | — |
| Return on Assets (before overlay): | 4.1% | 3.6% |
| Return on Equity: | 23% | — |
| Capital Adequacy Ratio: | 19.21% | — |
| Tier 1 Capital: | 14.73% | — |
| Total Liquid Assets: | ₹21,186 crores | — |
Segment-Wise Performance
The Vehicle Finance business reported 26% year-on-year disbursement growth in Q4, with Auto AUM increasing 18% year-on-year to ₹1,19,558 crores. The MSME segment — comprising LAP, SME, and SBPL — recorded 11% growth in Q4 disbursements, with overall MSME AUM growing 29% year-on-year. The Consumer segment delivered 45% year-on-year disbursement growth, with the newly launched Gold Loan business disbursing ₹1,130 crores in Q4 FY26. Consumer segment AUM grew 20% year-on-year, including 23% growth in Home Loans.
Segment-wise AUM details are as follows:
| Segment: | AUM | YoY Growth |
|---|---|---|
| Auto (Vehicle Finance): | ₹1,19,558 crores | 18% |
| LAP: | ₹52,295 crores | 26% |
| SME: | ₹9,338 crores | 41% |
| SBPL: | ₹3,537 crores | 46% |
| CSEL: | — | 4% |
| Home Loans (Consumer): | — | 23% |
Management Overlay and Asset Quality
As a precautionary measure against heightened global uncertainties — including volatility in crude and refined fuel prices, risk of LPG supply shortfalls, and supply-side pressures on sectors dependent on global shipping and commodity flows — the company provided a management overlay of ₹200 crores. Chief Financial Officer Arul Selvan clarified that no changes were made to the underlying PD-LGD assumptions; the overlay was determined based on past experience during similar situations such as the COVID period and phases of elevated diesel prices. Stage 2 assets showed steady improvement from the second quarter onwards, and Stage 3 assets also improved in Q4.
For CSEL, loan losses declined to 5.2% in Q4, and the segment recorded a Q4 ROA of 2.3%. Management guided that pretax ROA for CSEL should comfortably cross 3% during the current financial year, supported by further reductions in loan losses and improvement in NIMs. The business loan portfolio within CSEL stands at around ₹5,000 crores, of which approximately ₹3,500 crores — around 80% — was registered under CGTMSE. The CGTMSE insurance cost for the quarter was ₹38 crores.
FY27 Guidance and Capital Position
Management reiterated overall AUM growth guidance of 20% to 23% for the current financial year. Vehicle Finance is expected to grow at approximately 18%, while LAP and Home Loans are guided to grow in the range of 25% to 30%. Net credit cost is expected to decline from 1.6% (pre-overlay) to around 1.5%. NIMs are expected to remain stable at approximately 8%, and operating expenses are expected to remain around 3.0% to 3.1% of average assets. Pre-tax Return on Assets is expected to improve to around 3.5%.
The key guidance parameters are summarised below:
| Parameter: | Guidance |
|---|---|
| Overall AUM Growth: | 20%–23% |
| Vehicle Finance AUM Growth: | ~18% |
| LAP & Home Loan AUM Growth: | 25%–30% |
| Net Credit Cost: | ~1.5% |
| NIM: | ~8% |
| Operating Expense Ratio: | 3.0%–3.1% |
| Pre-tax ROTA: | ~3.5% |
| Gold Loan Branch Additions: | ~360 (current base: 119) |
| Home Loan Branch Additions: | ~100 |
| LAP Branch Additions: | ~100 |
On capital adequacy, Arul Selvan stated that if the Tier 1 ratio were to approach 13%, the company would evaluate equity-raising options. Given a pre-tax ROTA of around 3.5% and growth below 23% to 25%, the company expects to be largely self-sufficient through internal accruals. The Board has recommended a final dividend of ₹0.70 per share (35% on equity shares), subject to member approval at the ensuing Annual General Meeting, in addition to the interim dividend of ₹1.30 per share (65%) declared on 31 January 2026.
Earnings Call Details
| Parameter: | Details |
|---|---|
| Quarter Covered: | Quarter ended 31 March 2026 |
| Earnings Call Date: | 4 May 2026 |
| Transcript Upload Date: | 11 May 2026 |
| Regulatory Framework: | Regulation 30, SEBI (LODR) Regulations, 2015 |
| Recording & Transcript Access: | https://www.cholamandalam.com/investors/call-transcript |
Source: None/Company/INE121A01024/8768c1f6-17f0-4c33-894b-787423f1c158.pdf
Historical Stock Returns for Cholamandalam Investment
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.76% | +4.49% | +0.70% | -7.81% | -3.99% | +190.24% |
How might sustained global commodity price volatility and potential LPG supply disruptions impact Cholamandalam's vehicle finance portfolio quality and credit costs beyond the ₹200 crore management overlay in FY27?
With plans to expand Gold Loan branches from 119 to approximately 479, what competitive pressures could Cholamandalam face from established gold loan NBFCs like Muthoot and Manappuram, and how might this affect margin sustainability in that segment?
Given that Tier 1 capital stands at 14.73% with equity-raising considerations triggered near 13%, how could accelerated AUM growth toward the upper end of the 23–25% range affect the timeline for a potential equity dilution?
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