Cholamandalam Investment Q4 Review - Core Performance Stable; Valuations Rich: Axis Securities
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Axis Securities Report
Cholamandalam Investment and Finance Company Ltd. Q4 FY21 earnings performance was below our and street estimates, primarily on account of higher operating expenses and provisioning.
A higher sequential jump in staff costs (up 75%) and provisioning (up 13%) resulted in a 41% QoQ decline in profit after tax to Rs 2.43 billion.
The company has made additional Covid-19 provisions of Rs 3.5 billion.
Headline asset quality was marginally up at 3.96% versus 3.75% QoQ.
However, provision coverage ratio improved to 44.3%. Business assets under management grew 16% YoY while disbursals picked up by 43% YoY.
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