Employees gather in the lobby of the Bombay Stock Exchange (BSE) in Mumbai, India. (Photographer: Vivek Prakash/Bloomberg)

Cholamandalam Investment Q1 Profit Jumps 25% Backed By Healthy Loan Book

Financial services company Cholamandalam Investment and Finance Company Ltd. reported a 25 percent rise in profit for the April-June period backed by a healthy growth in loan book.

The Murugappa Group company clocked a net profit of Rs 207 crore, beating the Rs 196 crore consensus estimate of analysts tracked by Bloomberg. Net interest income, or the core income of the financial services company, jumped 23.8 percent year-on-year basis to Rs 694 crore.

Both gross and net non-performing loans remained stable sequentially at 4.7 percent and 3.2 percent respectively. Provisions stood at Rs 98 crore, compared to Rs 53 crore in the previous quarter. The loan book rose 14 percent to Rs 36,079 crore

Net interest margin (NIM) for the company stood at 8 percent, compared to 7.1 percent in the first quarter of previous financial year.

The non-banking and finance company expects strong growth trajectory for the NIMs going forward, Ravindra Kundu, executive VP and business head (vehicle finance) told BloombergQuint in a phone interview.

Its aggregate disbursements gained 6.4 percent year-on-year to Rs 4,853 crore, from the same period last year. Among the disbursements, its vehicle finance segment gained 15 percent, while home equity segment narrowed by 25 percent, year-on-year.

The home equity segment was expected to remain subdued due to an overcrowded market, said Kundu. He said the lender will take a ‘leap’ on the disbursement side in the next quarter or two.

An overall expansion plan is on the cards, Kundu said adding, the NBFC company plans to open another 100 branches in financial year 2017-18.