Cholamandalam Investment Q1: Net Profit Up 46% YoY, AUM Meets FY27 Guidance
Cholamandalam Investment & Finance reported a 46% YoY rise in standalone net profit to ₹1,653.59 crore for Q1FY27, with AUM growing 23% YoY to ₹2,54,392 crore, meeting the upper end of FY27 guidance of 20–23%. Asset quality softened slightly with Gross Stage 3 at 3.29% and Net Stage 3 at 1.81% on a QoQ basis, while the board approved ₹55,000 crore in NCD issuances to fund further expansion.
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Cholamandalam Investment & Finance Company Limited reported a 46% year-on-year rise in standalone net profit to ₹1,653.59 crore for the quarter ended June 30, 2026, surpassing analyst estimates of ₹1,560 crore, driven by a 28% growth in net income and robust asset expansion. The Board of Directors approved these results alongside a significant capital raise, authorizing the issuance of secured or unsecured Non-Convertible Debentures (NCDs) aggregating to ₹55,000 crore in one or more tranches via private placement.
The financial results were reviewed by the Audit Committee and subjected to limited review by joint statutory auditors M/s. B.K. Khare & Co. and M/s. KKC & Associates LLP, Chartered Accountants, in compliance with Regulation 33 and Regulation 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company confirmed that proceeds from NCDs issued during the quarter were fully utilized as per their respective Key Information Documents, with no deviation in the use of funds.
Financial Performance
Standalone revenue from operations rose 22% year-on-year to ₹8,833.38 crore, supported by a 21% increase in interest income to ₹8,039.92 crore. Total income reached ₹8,932.95 crore, up from ₹7,330.78 crore in the corresponding quarter of the previous year. Profit before tax (PBT) surged 45% to ₹2,220.49 crore. Consolidated net profit attributable to owners of the company stood at ₹1,656.22 crore, compared to ₹1,137.83 crore in Q1FY26.
| Metric: | Q1FY27 (₹ cr) | Q1FY26 (₹ cr) | YoY Change |
|---|---|---|---|
| Revenue from Operations: | 8,833.38 | 7,214.92 | +22% |
| Interest Income: | 8,039.92 | 6,650.07 | +21% |
| Profit Before Tax: | 2,220.49 | 1,529.64 | +45% |
| Net Profit After Tax: | 1,653.59 | 1,135.91 | +46% |
| Earnings Per Share (Basic): | ₹19.40 | ₹13.51 | +44% |
Asset Growth and Disbursements
The company's aggregate Asset Under Management (AUM) grew 23% year-on-year to ₹2,54,392 crore, meeting the upper end of the company's FY27 guidance range of 20%–23%. Aggregate disbursements for the quarter reached ₹29,612 crore, marking a 22% increase over the prior year. Vehicle Finance remained the largest segment, with disbursements of ₹16,503 crore and an AUM of ₹1,24,132 crore. Loan Against Property (LAP) disbursed ₹4,780 crore with an AUM of ₹54,130 crore, while Home Loans saw disbursements of ₹1,797 crore and an AUM of ₹23,644 crore.
Asset Quality and Capital Adequacy
Asset quality metrics showed slight movement on both a sequential and year-on-year basis. Gross Stage 3 assets rose to 3.29% from 3.05% on a quarter-on-quarter basis, while Net Stage 3 increased to 1.81% from 1.63% QoQ. Gross NPA as per RBI norms increased to 4.50% from 4.36%, while Net NPA rose to 2.95% from 2.87%. The Provision Coverage Ratio for Stage 3 assets was 45.73%. The Capital Adequacy Ratio (CAR) stood at 19.81%, well above the regulatory requirement of 15%, with Tier-I Capital at 14.81%.
The following table summarizes the key asset quality metrics on a sequential basis:
| Metric: | Q1FY27 | Q4FY26 (Mar 2026) |
|---|---|---|
| Gross Stage 3: | 3.29% | 3.05% |
| Net Stage 3: | 1.81% | 1.63% |
| Gross NPA (RBI norms): | 4.50% | 4.36% |
| Net NPA: | 2.95% | 2.87% |
| Provision Coverage Ratio (Stage 3): | 45.73% | — |
| Capital Adequacy Ratio: | 19.81% | — |
| Tier-I Capital: | 14.81% | — |
What the Numbers Show
The divergence between revenue growth (22%) and finance cost growth (15%) indicates improved net interest margins, directly fueling the 45% jump in pre-tax profits. The company's ability to exceed analyst estimates of ₹1,560 crore with an actual net profit of ₹1,653.59 crore further underscores the strength of its operating performance. AUM growth of 23% YoY aligns precisely with the top end of the company's FY27 guidance of 20%–23%, reflecting disciplined execution of its expansion strategy. While asset quality softened slightly with Gross Stage 3 ticking up to 3.29% and Net Stage 3 rising to 1.81% on a sequential basis, the strong provision coverage ratio of 45.73% suggests adequate buffers against credit losses. The massive ₹55,000 crore NCD approval signals aggressive intent to fund further asset expansion, leveraging the robust capital adequacy position to maintain market share in vehicle and property financing.
Historical Stock Returns for Cholamandalam Investment
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.80% | -1.67% | -1.18% | +6.91% | +17.63% | +262.53% |
How will the massive ₹55,000 crore NCD issuance impact Cholamandalam's future cost of funds and net interest margins in a potentially rising rate environment?
Given the sequential rise in Gross Stage 3 assets to 3.29%, what specific risk mitigation strategies is the company deploying to prevent further deterioration in asset quality?
Will the aggressive capital raise enable Cholamandalam to accelerate its market share gains in the competitive Vehicle Finance and Loan Against Property segments during FY27?
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