Cholaman.Inv.&Fn Q1 FY26 Results (NSE: CHOLAFIN)
Signal: Earnings grew
The read
Cholamandalam delivered a solid quarter with PAT growth of 45.6% YoY, driven by strong NII expansion (+20.9% YoY) and stable credit costs (~10.4% of revenue). GNPA inched up to 3.29% from 3.16% a year ago but the provision coverage ratio (PCR) improved to 45.73%. The 2.7pp lag of EPS growth behind PAT growth due to dilution from ESOP/CCD conversion is a minor concern. The board approved NCD issuance up to ₹55,000 Cr, signaling continued growth appetite.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹8,856.29 Cr | 21.9% | 5.2% |
| EBIT | ₹2,223.56 Cr | 45.1% | |
| Net profit | ₹1,656.22 Cr | 45.6% | |
| EPS | ₹19.33 | 42.9% |
P&L walk
Profit growth (+45.6% YoY) outpaced revenue growth (+21.9% YoY) due to stable NIM and lower opex ratio, with credit cost largely flat.
Segments
Vehicle Finance remains the largest segment (51.3% of revenue, PBT margin 20.6%); Loan against property (19.1% of revenue) saw strong PBT growth of 25.5% YoY; all segments grew profit YoY. The 'Others' segment (including securities and payments) showed robust revenue growth of 26.5% YoY.
Key positives
- PAT grew 45.6% YoY to ₹1,656 Cr, the highest Q1 profit ever.
- NII grew 23.6% YoY, driven by AUM expansion across all segments.
- Cost-to-income ratio improved to 32.3% from 35.1% YoY, showing operating leverage.
- CRAR remains strong at 19.81%, well above regulatory minimum.
- Fee income grew 36.9% YoY to ₹594 Cr, boosting non-interest income.
Key concerns
- GNPA (Ind AS) rose to 3.29% from 3.16% YoY and 3.05% sequentially, indicating some asset quality stress.
- EPS growth (42.9%) lagged PAT growth (45.6%) due to dilution from ESOP and CCD conversion.
- Cost-to-income ratio rose sequentially to 32.3% from 31.0% in Q4FY26, though still better than Q1FY25.
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