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.

Cholamandalam Investment and Finance Company, a part of the Murugappa Group, has reported a strong financial performance for the first quarter. The company's net profit surged by 21% to Rs 1,135.91 crore, up from Rs 942.23 crore in the same quarter of the previous year.

Financial Highlights

• Net Profit: Rs 1,135.91 crore (21% year-on-year growth)
• Total Income: Rs 7,330.78 crore (26% year-on-year increase)
• Overall Disbursements: Rs 24,325 crore (remained flat)

Segment-wise Performance

The company's various business segments showed mixed results:

Business Highlights

• Vehicle Finance: Showed a healthy growth of 7%, reaching Rs 13,647 crore in disbursements.
• Loan Against Property: Witnessed significant growth of 21.45%, with disbursements of Rs 4,705 crore.
• Home Loans: Experienced a marginal decline to Rs 1,764 crore from Rs 1,778 crore in the previous year.
• SME Business: Saw a decrease in disbursements to Rs 1,705 crore from Rs 2,160 crore, attributed to the company's decision to slow down certain low Return on Total Asset products.
• Gold Loan: Launched as a new business vertical during the quarter, with initial disbursements of Rs 100 crore.

Operational Reach

Cholamandalam Investment and Finance Company continues to maintain a strong presence across India with 2,481 touchpoints, ensuring wide accessibility for its financial services.

Recent Corporate Actions

The company recently held its 47th Annual General Meeting (AGM), where shareholders approved several key resolutions:

1. Adoption of standalone and consolidated financial statements for the year ended March 31.
2. Confirmation of interim dividend and declaration of final dividend.
3. Re-appointment of Mr. M A M Arunachalam as a director.
4. Appointment of M/s. BP & Associates as Secretarial Auditors for a five-year term.
5. Approval for increasing the company's borrowing powers.

These resolutions were passed with overwhelming majority, demonstrating strong shareholder support for the company's governance and future plans.

Cholamandalam Investment and Finance Company's robust performance in Q1, coupled with its strategic initiatives and shareholder approvals, positions the company well for continued growth in the financial services sector.