Financial services company Cholamandalam Investment and Finance has reported a 50 per cent jump in its net profit at Rs 136 crore in three months to March on improvement in asset quality and lower cost of funds.
The company had reported a profit after tax of Rs 91 crore in the year-ago quarter.
It also made an accelerated provision of Rs 44 core during the quarter, which includes provisioning to five months overdue and also standard asset provisioning to 0.30 per cent.
"Profit grew 50 per cent as our concentration was on reducing our NPA, higher collection of penal charges, which we charge on loan overdues and also as our cost of borrowing has come down," its chief financial officer D Arul Selvan said.
Gross NPA stood at 3.12 per cent, while the net NPA was at 2.03 per cent.
The company's marginal cost of borrowing reduced to 9.9 per cent from 10.2 per cent earlier.
Net income margin, as a percentage of assets stood at eight per cent during the period.
"The NIM was strengthened by a healthy increase in interest income, substantial increase in fee and other income, and a sustained reduction in interest cost," he said.
It disbursed Rs 2,564 crore in vehicle finance business in the quarter as against Rs 2,795 crore last year.
Home Equity disbursement grew by 9 per cent to Rs 857 crore from Rs 785 crore.
The capital adequacy ratio (CAR) of the company was at 21.24 per cent as against the regulatory requirement of 15 per cent.
He said the company it borrowed Rs 9,200 crore in FY15 and is planning to raise similar amount this year as well.