Cholamandalam Investment and Finance Company Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Dhaval Gada - DSP - Analyst : Yeah, hi, thanks for the opportunity and congratulations on good performance. I had two questions. First relates to, overall growth. Could you just, highlight, the growth expectation for next year? Last time I you had mentioned 25%, for next year as well as medium term. Could you just, re highlight that and, also specifically if you can touch upon, the home loan. Business, growth, earlier you commented that, we sort of, accelerate, stabilize, and again accelerate on this business, so we've seen a, 16%, growth in disbursement this year, whereas the capacity growth is much higher. So, should we expect significantly better growth in in F 526 and, any comment around that would be useful and the second question, relates to. Credit cost, on the newer businesses, we've seen an increase, in all the three businesses, the CE as well as, SVPL and SME, business. Could you, highlight like, are these at peckish levels and we should see improvement across all businesses or any comment around, credit cost in the newer businesses for FY '26 would be useful. Thank you.

Question: Dhaval Gada - DSP - Analyst : Hello, sorry just, could you, just one follow up, on the growth question, if you could, talk a little bit around these newer segments that are getting added, should in the medium term, should this be additive to the oral growth profile of 2020. 5% or this would help us sustain these levels of growth. Any comment around that would be useful. Thank.

Question: Dhaval Gada - DSP - Analyst : I got it. Thanks, and wish you all the very best. Thank you.

Question: Raghav Garg - Ambit Capital - Analyst : Sir, hi, good morning, and thanks for the opportunity and congrats on the folky performance. I have a few questions. One, just for clarification purposes, did you say that A1 broke for retail finance will be 30% in F 526? Is that what you said? Sorry, I may have missed it.

Question: Raghav Garg - Ambit Capital - Analyst : Understood. And sir, I was looking at your 4 numbers generally for the finance segment. There seems to be some seasonality in the finance field, in 4th quarter. It tends to increase about 30 to 40 basis points quarter on quarter every time in 4 4th quarter. Why is that?

Question: Raghav Garg - Ambit Capital - Analyst : No, I'm saying that in the 4th quarter your vehicle finance yields, tends to increase quarter on quarter by 30 to 40 basis points and then, in the following quarter, which is the first quarter, it comes.

Question: Raghav Garg - Ambit Capital - Analyst : Understood, and so just, one of the last questions from my side has the cost of, hedging on foreign boardings gone up in recent months? Generally, what is your observation cost costing on cost of hedging on foreign borrowing, has it gone up generally for.

Question: Raghav Garg - Ambit Capital - Analyst : A peer from my side. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 4:30AM, CHLA.NS - Q4 2025 Cholamandalam Investment and Finance Company Ltd Earnings Call

Question: Abhijit Tibrewal - Motilal Oswal - Analyst : Yeah, good morning, everyone, and thank you for taking my question. Just two questions, trying to understand first thing from a sir. So this year, how are we looking at our cost of boardings getting repriced, with the assumption of maybe one or two more rate cuts in the coming quarters, how would you look at, cost of bings coming down and to that end, given our home loan lap and SME book cost looking rate. What proportion of it is passed on eventually, what, margin expansion, can one build in this? Fiscal year and the second question are for, Ravisha. So just trying to understand, I mean, very clearly there is, tightness in terms of collections which is evident, also showing up in credit costs, this year, all four quarters credit costs in absolute terms all but in a very tight range, so when we say next year, the credit costs will be lower. What has to change from where we are today, what we saw last year, and what has led us, led us to Where we are today. So from here, what has to change for the environment to improve and credit costs to come down next year? These are the two things. I wanted to understand and I'll just squeeze in one last question. We have already announced the launch of our Golden business. If you could give some color around how are we approaching the Golden businesses which geographies we target, and also the ticket sizes that we'll be looking at and, eventually in the next 1 or 2 years, what proportion of the loan mix can goal loans become.

Question: Abhijit Tibrewal - Motilal Oswal - Analyst : Okay, so this is all from my side. Thank you and wish you and the team the very best. Thank you.

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Yeah, hi, good morning. Thanks for the opportunity. My question is on OpEx. I mean, in this Q4 if we see OpEx has kind of for the growth of OpEx and materially slowed down. I mean that is a bit untypical of the Q4. So, what were the reasons and going ahead, with some part of Office, seeing increases with launch of gold finance and all, how do you see O to trend over the next year? Thanks.

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Okay, thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 4:30AM, CHLA.NS - Q4 2025 Cholamandalam Investment and Finance Company Ltd Earnings Call

Question: Harshit Toshniwal - Premji - Analyst : Yeah, hi sir, am I audible? Yes, please. Proceed. Yeah, so this is on the assignment, so I think we had that last quarter, and we also have it this quarter. I just wanted to check that is this now a consistent strategy going forward that we do some assignments because this is something that we have been doing only the last two quarters.

Question: Harshit Toshniwal - Premji - Analyst : Got it. Got it. Sure, and so on the vehicle finance, I think, the guidance you mentioned that we would want to increase the disbursement for to maybe 15 to 20% from the 12% where we saw this year. But if you can give some color as to what segments, you want to focus this year, where do you see the green shoots, and, in the context of economic recovery also you are we building some of that into our guidance.

Question: Harshit Toshniwal - Premji - Analyst : Sure, got it. Okay, sir, thanks a lot.

Question: Kunal Shah - Citi Group - Analyst : Yeah, first, just to check on the home loan, we indicated that the growth, should improve both in terms of disbursements as well as, a, almost like 15-20% disbursements, so what ideally would lead to that kind of an improvement maybe this, year the overall disbursements in home loan has not been that great and, secondly, on lab when we look at it, in fact, it's been growing quite well. So would we see some kind of a normalization coming in left or maybe the growth traction in left should still continue.

Question: Kunal Shah - Citi Group - Analyst : Yeah, so particularly left you are still saying it might continue with 25 to 30 odd% that are still like, maybe the opportunities available and the levers available to continue at that pace. Okay. And on new businesses, when do we start seeing the pickup, maybe would it be after the first half where we will see maybe the, credit cost also normalizing, or maybe now that is also almost bottomed out in terms of growth and we are getting confident, particularly on the SME and the other segments because otherwise this was when growth, that this quarter has not been degrading the new businesses.

Question: Kunal Shah - Citi Group - Analyst : Perfect, yeah, that helps. Thank you.

Question: Viral Shah - IIFL - Analyst : Yeah, hi, thank you for the opportunity. So just, follow up on the previous question, you mentioned that you will be rolling out a separate, branch for gold loan. Can you just explain the rationale behind that because until now the businesses that we have been scaling up, we have tried to utilize the existing network and also some of our peers have been using, say the existing branches to do the gold loan business. There's a thought process there.

Question: Viral Shah - IIFL - Analyst : Okay, and, so just as a corollary to that the OpEx, guidance that, rules are given, it kind of, bakes in all the this branch expansion that you will be doing and also some bit of pick up in the disbursements that will happen, in the overall business, right, because you are seeing that in vehicle finance that the disbursement will pick up, so will our incentives. So just wanted to get a sense on that.

Question: Viral Shah - IIFL - Analyst : Got it. Thank you so much and all the best.

Question: Piran Engineer - CLSA - Analyst : Yeah, so just wanted to get a sense, more quantitatively on what could be the disbursement growth in SME lending next year because while this quarter was down because we slowed down in supply chain, if I look at the last 5-6 quarters, it's been flattish. So I just wanted to get a sense on that, and then the next question is, what is like the time in terms of number of branches you can do lap and home loans from like we're already at almost 800 branches in lab and 700 odd in home loans. Could that go up further, or now growth will be a function of, just improving branch productivity rather than branch expansion.

Question: Piran Engineer - CLSA - Analyst : Okay, that answers my question, so thank you and wish you all the best.

Question: Renish Bhuva - ICICI Securities - Analyst : Yeah, hi sir. Just the one question from my side on this, Tamil Nadu Bay, sort of, table over the weekend, and, given, our, major exposure, would be high state, so how confident we are about, sort of, sustaining the growth rates or even credit cost. And maybe if you can just, tell us, the reality at around, post, this way. I know it's too early, but, what is your assessment?

Question: Renish Bhuva - ICICI Securities - Analyst : But in Kar they have still seen a set of players getting infected because, it takes time at borrow level to fully understand the bill, etc. I know MFI or maybe a small ticket loans will be more vulnerable, but, do you think, I mean, in your portfolio any of the product is vulnerable. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 4:30AM, CHLA.NS - Q4 2025 Cholamandalam Investment and Finance Company Ltd Earnings Call

Question: Renish Bhuva - ICICI Securities - Analyst : Got it. Okay, that's it for myself, sir. Thank you.

Question: Pranuj - JPMorga - Analyst : Hello, thank you for taking my question. So just one question on HL the delinquency rates have risen up to 0.6%. So, is there any concern out over here? And second, is a clarification are also so that 3 to 3.1% OpEx, that is OpEx to assets, right?

Question: Pranuj - JPMorga - Analyst : Understood. So, on full year basis you still expect to maintain that 4% for 5%

Question: Pranuj - JPMorga - Analyst : Understood. Thank you, sir.

Question: Shweta Daptardar - Elara Capital - Analyst : Thank you sir for the opportunity. From the vehicle finance portfolio, have you seen any write-offs? And if you could provide any color on the sub-segment that you might be closely monitoring or seeing vulnerability.

Question: Shweta Daptardar - Elara Capital - Analyst : Okay. And how about bounce rates and early on delinquencies for PDPD book in the vehicle centre? How is that faring? Thank you.

Question: Shweta Daptardar - Elara Capital - Analyst : Very helpful, sir. Best of luck. Thank You

Question: Maruk - Nuvama Wealth - Analyst : Yeah, hello, good morning, sir. I have, one question only on asset quality. So, I think you answered, you replied to Shweta party, but this time the 4th quarter seasonality was not strong, and you had already been guiding to that. So, does that mean that the 12-week seasonality will also not be as pronounced? Is that a fair takeaway in vehicles especially?

Question: Maruk - Nuvama Wealth - Analyst : That was my only question. thank you, sir. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 4:30AM, CHLA.NS - Q4 2025 Cholamandalam Investment and Finance Company Ltd Earnings Call

Question: Aluka - UBS - Analyst : Yeah, hi, morning, sir. So did I hear correctly that you said 1.5% of your book is, fintech driven partnership, AUM.

Question: Aluka - UBS - Analyst : Okay, so sir, are we saying that first half of the year and CLs will still be high in CL, primarily because of this fintech book? So, on this remaining 2000 crore AUM we are expecting another 500, 700 karo of credit cost. Is that fair to say that

Question: Aluka - UBS - Analyst : Yeah no that's fair, sir. Yeah, okay. And, sir, in this quarter you have, done some extra provisioning in CL. Could you give that number.

Question: Aluka - UBS - Analyst : Okay, got it, sir.

Question: Aluka - UBS - Analyst : Yes, got it Sir. Okay, thank you, sir, yeah.

Question: Rajiv Mehta - YES Securities - Analyst : Yeah, hi, good morning. Just one question on vehicle finance. So, there's a clear pick up in, new LCV and SCV financing in the past two quarters. If you can comment on that. And second, when I look at your growth in car and UV financing also, you are significantly outperforming the underlying industry sales. So, what is driving this? Have we tied up with more OEMs, yeah, or otherwise for more models? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 4:30AM, CHLA.NS - Q4 2025 Cholamandalam Investment and Finance Company Ltd Earnings Call

Question: Rajiv Mehta - YES Securities - Analyst : Yeah, that's it for me. Thank you.

Question: Dhaval Gada - DSP - Analyst : Yeah, thanks for the follow up. I just a quick one on the profitability. So overall, what we're saying is, for F 526, we are expecting margin improvement, OpEx improvement, and, credit cost improvement, which should basically mean that 3.5% PBT router that we were guiding to, should be an, target, for us and. And if yes then is that a sustainable level, from there on or we further invest back in the business and therefore we'll see some bit of volatility in in coming years on the PBT order like just directly, with this, change in the business model diversification, etc. Is the 3.5%, now a sustainable number or not? That that's what I wanted to get through. Thank you.

Question: Dhaval Gada - DSP - Analyst : Got it. And just, a clarification in terms of new businesses apart from gold loan and, consumer durable, lending, what other, sizable opportunities do you think we can, tap in the next, a few years? I think directly, would the consumer side of the business be big focus, I'm just trying to understand where the investments would be incrementally in the coming years.

Question: Dhaval Gada - DSP - Analyst : I got it, sir. Thank you and wish you all the very best. Thank you.