Q3 results: CIFCL PBT grows 9.4% at Rs 522.90 crore, income up by 23%

Cholamandalam Investment and Finance Company Ltd (CIFCL), part of Murugappa Group posted 9.36 per cent growth with Profit Before Tax (PBT) at Rs 522.90 crore in the third quarter of FY20, as against Rs 478.16 crore during the same quarter last year.

The total income grew 23 per cent to Rs 2,289.3 crore during the quarter, as compared to Rs 1,860.58 crore posted in the corresponding period of the previous year.

The company will be issuing shares to its promoter entity Cholamandalam Financial Holdings Ltd to raise around Rs 300 crore in one or more tranches.

Vehicle finance business saw a decline of 5.22 per cent during the quarter ended December 2019, at Rs 5,949 crore as against Rs 6,277 crore for the same quarter of the previous year. The depreciation in vehicle finance was due to slowdown in the commercial vehicles segment during this quarter, it said.

Meanwhile, home equity disbursement for the quarter was at Rs 908 crore as against Rs 954 crore for the same quarter of last year. The Assets Under Management (AUM) grew by 25 per cent at Rs 65,992 crore year-to-date as of December 2019 as compared to Rs 52,591 crore in the same period last year.

Arun Alagappan, Managing Director, CIFCL stated “In Q3 of FY20, faced with the slowdown in the auto sector we changed our product mix to shore up our net interest income. Accordingly, we were able to grow our AUM at over 25 per cent and PAT growth over 28 per cent. While doing this we were able to contain our Stage 3 levels at 3.5 per cent which is a reflection of our asset quality.”

The asset quality marginally increased in the Stage 3 receivables to 3.54 per cent in December 2019, from 3.30 per cent last year, with provision coverage of 33 per cent.

The Board also approved the appointment of Ravindra Kumar Kundu, president, and business head - vehicle finance as an executive director of the company for five years with immediate effect.