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:
| Segment: |
AUM |
YoY Growth |
| Total AUM: |
₹2,42,630 crores |
21% |
| Auto AUM: |
₹1,19,558 crores |
18% |
| LAP AUM: |
₹52,295 crores |
26% |
| SME AUM: |
₹9,338 crores |
41% |
| SBPL AUM: |
₹3,537 crores |
46% |
| MSME Segment AUM: |
— |
29% |
| Consumer Segment AUM: |
— |
20% |
| Home Loans AUM: |
— |
23% |
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.
| Metric: |
Q4 FY26 |
Q4 FY25 |
| Return on Assets (before overlay): |
4.1% |
3.6% |
| Return on Equity: |
23% |
— |
| NIMs improvement (YoY): |
+40 bps |
— |
| Credit Costs (before overlay, YoY change): |
-20 bps |
— |
| Operating Expense Ratio: |
~3.1% |
~3.0% |
| CSEL Loan Losses: |
5.2% |
— |
| CSEL ROA (Q4): |
2.3% |
— |
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.
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