Top News of The DayCholamandalam Investment and Finance Company Ltd, a part of the Murugappa Group, has posted a growth of 49.5 per cent in net profit during the quarter ended September 30, 2018, to Rs 3.05 billion, as compared to Rs 2.04 billion during the same quarter of the last year.
The total income stood at Rs 16.75 billion during the quarter as against Rs 13.50 billion in the corresponding quarter a year ago.
“In the first quarter, the growth rate was predominantly led by heavy commercial vehicles, which has continued in the second quarter. However, in the second quarter, we have also seen growth in the used segment, as well as tractors and construction equipment,” said a company spokesperson. He added that the company was looking at overseas investors who could come in with a bigger quantum to do debt-side funding, apart from banks for borrowing. The company has also started scaling up in the two-wheeler segment, which is currently a very small part — not even one per cent — of the business. “It will take a long time to become a visible component of our business. The company is not looking at this business aggressively as of now and only caters to selective brands like Royal Enfield and Hero,” said the spokesperson.
During the quarter ended September, Chola has seen its non-performing assets (NPAs) come down.
Its NPAs stood at 2.8 per cent at the end of the quarter. The collection efficiency has improved and it was able to contain NPA growth using an analysing model. The model has helped in making the right choice of customers and pricing. The company expects that it still has headroom on collection efficiencies and NPA ratio. The company is expecting the National Housing Bank’s (NHB’s) approval for its housing finance subsidiary in the next two to three months. Vehicle finance contributes around 75 per cent of the business at present, while home equity accounts for around 23 per cent, with the rest of the revenue coming from other segments.