Cholamandalam Investment and Finance Company Limited reported aggregate disbursements of ₹32,913 crores for Q4 FY26, representing 25% year-on-year growth, as the company's AUM rose 21% to ₹2,42,630 crores. The results, discussed during the Q4 FY26 Earnings Conference Call held on May 04, 2026, reflected broad-based momentum across all major product segments, improved profitability metrics, and a cautious management overlay in response to heightened global uncertainties.

Disbursement and AUM Performance

Disbursement growth in Q4 FY26 was driven by strong performance across all business segments. The Vehicle Finance business recorded 26% year-on-year disbursement growth, with Auto AUM rising 18% year-on-year to ₹1,19,558 crores. The Consumer segment delivered 45% year-on-year disbursement growth, with the newly launched Gold Loan business disbursing ₹1,130 crores in Q4 FY26. The MSME segment—comprising LAP, SME, and SBPL—recorded 11% year-on-year disbursement growth. Home loan disbursements saw mild moderation in Q4 due to procedural timing factors, including election-related administrative slowdowns and localized lien-marking delays in select markets.

The following table summarizes AUM performance across key segments:

Profitability and Asset Quality

Profitability improved meaningfully in Q4 FY26. NIMs improved by 40 bps 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 bps year-on-year across product segments. 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 CSEL segment reported loan losses declining to 5.2% in Q4, with a Q4 ROA of 2.3%. Management indicated that pre-tax ROA for CSEL should comfortably cross 3% during the current financial year, supported by further reductions in loan losses and improvement in NIMs. Operating expenses remained broadly stable at around 3.1% of assets compared to 3.0% in the prior year.

Management Overlay and Capital Position

In response to heightened global uncertainties, the company provided a precautionary management overlay of ₹200 crores. The overlay addresses potential second-order stresses arising from 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. Management clarified that no changes were made to underlying PD-LGD assumptions, and that the overlay was determined based on past experience during similar situations, including the COVID period and phases of elevated diesel prices.

The company's capital adequacy position stood at 19.21% in March 2026, with Tier 1 capital at 14.73%. The company holds a total liquid asset of ₹21,186 crores, including undrawn sanction lines, with no negative cumulative mismatches across all time buckets. Out of total CCD issuances of ₹2,000 crores, ₹1,370 crores were converted in FY26, with the balance ₹630 crores expected to be converted in the first half of FY27.

The Board of Directors recommended a final dividend of ₹0.70 per share (35% on equity shares), subject to member approval at the ensuing Annual General Meeting. This is in addition to the interim dividend of ₹1.30 per share (65%) declared on January 31, 2026, for FY25-26.

Gold Loan Business and Branch Expansion

The Gold Loan business, launched approximately nine months prior to the call, disbursed ₹1,130 crores in Q4 FY26. The average ticket size per loan has declined from approximately ₹3 lakh at inception to approximately ₹2 lakh, reflecting a more granular acquisition strategy. Yield on gold loans has moved up to 15%, which management described as healthy relative to peers. The company currently operates 119 gold loan branches and plans to add 360 more, targeting approximately 480 branches. Gold loan branches will be exclusive, while other business expansions—including approximately 100 new Home Loan branches and 100 new LAP branches—will be co-located within the existing Vehicle Finance branch network.

FY27 Outlook and Guidance

Management reiterated overall AUM growth guidance of 20% to 23% for FY27. At the segment level, 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%. Newer businesses are expected to grow at higher rates. Net credit cost is expected to decline from 1.6% (pre-overlay) to approximately 1.5%, which should support a pre-tax ROTA of approximately 3.5%. NIMs are expected to remain broadly stable at around 8%, with operating expenses expected to remain around 3% of average assets. For CSEL, combined portfolio asset growth—including unsecured personal loans, business and professional loans, consumer durables, digital, and mobile lending—is expected to reach approximately 20% by Q4 of the current financial year. The Fintech rundown book is expected to be in the range of ₹300 to ₹400 crores, with a relatively long tail spread across the year.

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:

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:

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:

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

Source: None/Company/INE121A01024/8768c1f6-17f0-4c33-894b-787423f1c158.pdf