Cholamandalam Investment and Finance Company Limited (Cholamandalam Investment) has announced a revision in its Assets Under Management (AUM) growth guidance for the full year. The company has adjusted its forecast to 20-23%, down from the previously projected range of 20-25%.

Revised Growth Outlook

The company cited recent GST reductions as a key factor influencing this adjustment in its growth outlook. This change in tax structure appears to have impacted Cholamandalam Investment's projections for its asset portfolio expansion.

Impact of GST Reductions

While specific details about the GST reductions were not provided, it's clear that these tax changes have prompted the company to reassess its growth expectations. The narrowed range suggests a more conservative approach to growth forecasting in light of the evolving tax environment.

Company's Response

Despite the slight downward revision, Cholamandalam Investment continues to project substantial growth in its AUM. The new guidance of 20-23% still indicates strong confidence in the company's ability to expand its asset base.

Investor Education Initiative

In other news, Cholamandalam Investment is participating in the "100 days campaign - Saksham Niveshak" initiated by the Investor Education and Protection Fund Authority. This campaign aims to encourage shareholders to update their KYC details, bank mandates, and contact information.

The company has urged shareholders with unclaimed or unpaid dividends from the financial years 2018-19 onwards to contact the company or its Registrar and Transfer Agent, KFin Technologies Limited, to update their information. This initiative is designed to facilitate the payment of unclaimed dividends and enhance shareholder engagement.

Cholamandalam Investment's proactive approach in both adjusting its growth forecasts and participating in investor education initiatives demonstrates its commitment to transparency and shareholder value in a changing financial landscape.

Cholamandalam Investment , a prominent player in the financial services sector, remains optimistic about its Assets Under Management (AUM) growth despite facing challenges in its vehicle finance segment. The company has reported mixed performance across its various business lines, with management maintaining a positive outlook for the full fiscal year.

Vehicle Finance Segment Performance

Cholamandalam Investment has achieved an impressive 18% AUM growth in its vehicle finance segment, despite a lower-than-expected disbursement growth of 7%. This performance falls short of the company's initial 15% disbursement target for the segment.

Management's Focus on AUM Growth

CFO Arul Selvan emphasized the company's strategic focus on AUM growth rather than disbursement growth. He explained that AUM growth is a key driver of interest income, highlighting the company's prioritization of sustainable long-term revenue generation over short-term disbursement figures.

Home Loan Segment Shows Resilience

The home loan segment of Cholamandalam Investment demonstrated strong resilience, posting a robust 33% year-on-year AUM growth. This impressive performance was achieved despite flat disbursement growth, which the company attributes to changes in the registration process in key markets such as Karnataka.

Maintaining Full-Year Growth Targets

Despite the mixed performance in different segments, Cholamandalam Investment remains confident in its growth prospects. The company is maintaining its full-year AUM growth target of 20-25%. Management expects to see improvement in the third and fourth quarters, particularly after the monsoon season and during the festive period.

Diversified Borrowing Strategy

To support its growth and operations, Cholamandalam Investment employs a diversified borrowing strategy. The company borrows between Rs 7,000 crore to Rs 10,000 crore monthly through various channels. These include:

• External Commercial Borrowings (ECBs)
• Commercial Papers
• Non-Convertible Debentures (NCDs)

This multi-channel approach helps the company maintain financial flexibility and manage its cost of funds effectively.

Expansion of Gold Loan Business

In a strategic move to diversify its portfolio and tap into new growth opportunities, Cholamandalam Investment is expanding its gold loan business. The company plans to increase its gold loan branch network from 75 to 120 branches by the end of the second quarter, signaling a strong push into this segment.

Cholamandalam Investment's ability to maintain AUM growth despite challenges in disbursements showcases the company's resilience and strategic focus. As the company continues to navigate market dynamics and expand its product offerings, investors and industry observers will be keenly watching its performance in the coming quarters.