Cholamandalam Investment and Finance Company (Chola), the financial services arm of Murugappa group, has said it expects a growth of 20-25% in its assets under management (AUMs) for the current financial year. The company believes that it can achieve a disbursement growth of 25-30% by the end of FY23.
Chola reported a robust disbursement growth in Q2 as well as in the first half of FY23. Aggregate disbursements in the September quarter stood at Rs 14,623 crore, against Rs 8,706 crore, registering a growth of 68%. For the first half, disbursements were at Rs 27,953 crore, compared with Rs 12,341 crore, a growth of 127%.
Chola had recorded a 36% jump in disbursements to Rs 35,489 crore for FY22, against Rs 26,043 crore in the previous fiscal.
Arul Selvan D, president & CFO, told FE that the company expects a disbursement growth of 25-30% by the end of the current fiscal. He believes that the demand for vehicles will continue in the second half as the monsoon has been good, resulting in better rural income which will auger well for its vehicle finance vertical.
He said disbursements will be robust, and accordingly the AUM level will reflect the overall growth. The company also believes that the profitability will be better than the year-ago period.
“Disbursement for Q2 were quite good and we grew by 68% year-on-year. For the overall first half, disbursements were up 127% as Q1 of last fiscal was a bad quarter for us. The growth was aided by an impressive performance of the new verticals which were not there last year…” Selvan said.
NPAs are expected to come down during the second half. “We have been progressively bringing down the NPAs since Q4FY22. We have done good job on NPA reduction during the first two quarters of the current fiscal as well,” he said.
Chola’s asset quality represented by Stage 3 assets stood at 3.84% with a provision coverage of 41.48%, against 4.16% as at end of June 2022 with a provision coverage of 40.69%.