You are here » Home » Companies » Company Overview » Cholamandalam Financial Holdings Ltd

Cholamandalam Financial Holdings Ltd.

BSE: 504973 Sector: Financials
NSE: CHOLAHLDNG ISIN Code: INE149A01033
BSE 00:00 | 07 Aug 336.25 4.80
(1.45%)
OPEN

335.10

HIGH

345.00

LOW

334.00

NSE 00:00 | 07 Aug 336.40 3.65
(1.10%)
OPEN

338.30

HIGH

338.30

LOW

332.90

OPEN 335.10
PREVIOUS CLOSE 331.45
VOLUME 1534
52-Week high 568.20
52-Week low 222.00
P/E 75.73
Mkt Cap.(Rs cr) 6,311
Buy Price 333.00
Buy Qty 1.00
Sell Price 344.95
Sell Qty 250.00
OPEN 335.10
CLOSE 331.45
VOLUME 1534
52-Week high 568.20
52-Week low 222.00
P/E 75.73
Mkt Cap.(Rs cr) 6,311
Buy Price 333.00
Buy Qty 1.00
Sell Price 344.95
Sell Qty 250.00

Cholamandalam Financial Holdings Ltd. (CHOLAHLDNG) - Chairman Speech

Company chairman speech

Dear Shareholders

Financial Year 2019 (FY19) started off on an optimistic note with tailwinds from smooth functioning of the Goods and Services Tax (GST) framework thrust to the rural and infrastructure sectors in the Union Budget 2018-19 recapitalization of public sector banks and resolution of distressed assets under the Insolvency and Bankruptcy Code. Gross Domestic Product (GDP) grew close to 7.5% during the first half of FY 19 driven by healthy demand across sectors. However risk aversion and tight liquidity conditions decelerated the global & domestic economy during the second half. Domestic growth slowed-down to 6.2% accentuated by subdued private consumption slower growth in fixed investment and muted exports in the second half of FY 19.

The financial services sector faced liquidity constraints due to default on payment by few finance companies and a slow-down in auto and real estate sectors. Growth in the Company's NBFC segment was primarily supported by the Commercial Vehicles (CV) industry. Following a healthy demand from freight generation sectors and infrastructure pick-up CV industry delivered strong growth in the first half year. The adverse impact due to tightening of financing following the liquidity crunch higher fuel costs and weak freight rates affected CV demand in the second half year. Despite this the commercial vehicle segment grew by 18% year-on-year. Domestic Car and Utility vehicle industry had a modest growth of 4% and the tractor industry grew by 12% in FY 19. Cholamandalam Investment and Finance Company Limited (CIFCL) a listed NBFC offering vehicle finance home loans and home equity loans in which the Company holds 46.4% stake has performed well during the year. CIFCL recorded an overall disbursement of Rs. 30450.95 Crore and profit before tax of Rs. 1823.15 Crore in FY 19.

In the insurance sector the Gross Direct Premium of non-life insurers (excluding Standalone Health & Specialised insurers) reported a growth of around 13% over the previous year. Motor Health and Crop segments continued to constitute a significant portfolio at about 80% of the total business. Cholamandalam MS General Insurance Company Limited (Chola MS) a general insurance company in which the Company holds 60% stake recorded a Gross Direct Premium of Rs. 4541.10 Crore in FY 19. Besides CIFCL and Chola MS the Company holds investment in Cholamandalam MS Risk Services Limited a joint venture engaged in risk management and environmental solutions.

The Company's revenue predominantly consists of dividend income from these companies and royalty income from brand usage rights. During the year the Company was rechristened as Cholamandalam Financial Holdings Limited. Profit of the Company for FY 19 was Rs. 66.53 Crore and at a consolidated level Rs. 1414.83 Crore. I am glad to inform you that the Board recommended a final dividend of Rs. 0.65 per equity share of Rs. 1/- each subject to shareholders' approval at the forthcoming AGM in addition to an interim dividend which was paid at the rate of Rs. 0.60 per share. With strong macro-economic fundamentals inflation under control Reserve Bank of India's continued support to boost liquidity and possible vehicle purchases in advance due to Bharat Stage-VI implementation next year the financial services sector is expected to bounce back in FY 20. IRDA's move of making long-term policies for cars and two-wheelers mandatory is also a welcome change providing impetus to the general insurance sector.

We are confident that with better growth prospects the Company will continue its focus towards financial service businesses thereby building on its core strengths and enhancing shareholders value.

On behalf of the Board I thank all our stakeholders - our customers employees business partners and vendors for their trust support and encouragement towards the Company's development and progress. I would also like to express my gratitude to you - our shareholders for your unconditional faith and support.

Warm Regards

M M Murugappan