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Cholamandalam Investment and Finance Company Ltd.’s asset quality deteriorated (surprised negatively) with gross stage-III assets increased to 6.79% versus 3.96% QoQ (3.34% YoY).
Also, restructured assets increased to 5.4% of loan book; higher than its peers which is the key concern.
However, Cholamandalam Investment’s management is quite confident of recovery in coming quarters which is visible in improvement in collection efficiency; July at 114% versus June at 101% versus May at 84%.
Further, Covid-19 related provisions stood at 1.0% of assets under management which should support credit cost for FY22.
Net interest margins remain stable at 7.6% QoQ.
AUM growth declined to 7% YoY (16% FY21) led by slower growth in disbursements (up 1% YoY) and higher repayments.
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