Murugappa Group's Chola sees 28% rise in first quarter net profit

Cholamandalam Investment and Finance Company Ltd (Chola), the financial services wing of the Murugappa Group, has reported a 28 per cent rise in net profit for the first quarter of the fiscal year 2023-24, reaching Rs 726 crore. This compares favourably to Rs 566 crore during the same period in the last financial year.

During the review period, Chola's total income saw a significant increase of 49 per cent, moving from Rs 2,771 crore in the last fiscal year to Rs 4,134 crore this year. The company's assets under management (AUM) also demonstrated an upswing of 42 per cent, rising from Rs 86,703 crore in Q1 FY23 to Rs 1.23 trillion in Q1 FY24.

The firm observed a reduction in Stage 3 levels, from 4.16 per cent in June 22 to 3.06 per cent in June 23. Chola's gross non-performing asset (GNPA) decreased to 4.30 per cent in June 23, compared to 4.63 per cent in March 23. Likewise, net NPA dropped to 2.82 per cent in June 23 from 3.11 per cent in March 23, according to the company's statement.

Aggregate disbursements in Q1 FY24 amounted to Rs 20,015 crore, showing an impressive 50 per cent growth from Rs 13,329 crore in Q1 FY23. Vehicle Finance (VF) disbursements stood at Rs 11,301 crore in Q1 FY24, a 32 per cent rise from Rs 8,562 crore in Q1 FY23. The Loan Against Property (LAP) business disbursed Rs 2,679 crore during the quarter, marking a growth rate of 32 per cent from Rs 2,036 crore in the same quarter of the last fiscal year.

Chola's Home Loan business disbursed Rs 1,454 crore in Q1 FY24, a substantial 138 per cent growth from Rs 611 crore in Q1 FY23. Small and Medium Enterprises Loan (SME) business disbursed Rs 2,045 crore in Q1 FY24, marking a 98 per cent increase from Rs 1,030 crore in Q1 FY23. Additionally, the Consumer and Small Enterprise Loans (CSEL) business disbursed Rs 2,355 crore during the quarter, a 123 per cent increase from Rs 1,055 crore in Q1 FY23.

As of June 2023, the company's Capital Adequacy Ratio (CAR) stood at 17.44 per cent, comfortably exceeding the regulatory requirement of 15 per cent.