Cholamandalam Finance Q4 profit up 42% on vehicle financing

CHENNAI: Diversified non-banking finance company Cholamandalam Finance saw Q4 profit up 41.6% to 192 crore from last year from strength in its commercial vehicle finance lending business.

Chennai-based Cholamandalam Investment & Finance Co Ltd disbursed 3,760 crore through its vehicle business in the fourth quarter, a growth of 47% in its loan book, compared to 2,564 crore in the same quarter last year. “With favourable revival of the commercial vehicle market coupled with our focussed approach and strengthening dealership networks, the vehicle finance division registered a disbursement growth of 32% for the full year,” said Cholamandalam in its earning release. For the full year, the group saw a profit of 568.46 crore, an increase in 31% since last year.

The group also saw an equal rise in its home loan portfolio with a 16% growth in book to 994 crore in Q4. Net interest margin as percentage of assets improved to 9.4% in Q4 from 8% for the same period last year. The board also recommended a 20% increase in dividend, subject to approval. Cholamandalam's asset quality improve with non-performing loans (NPAs) decreasing sequentially to 3.5% in March 2016 from 4.3% in December 2015.

The company set aside more money — 54.80 crore towards its bad loans that were three months overdue. Capital adequacy ratio (CAR) at the lender was at 19.68% as against the regulatory requirement of 15%.