Cholamandalam Investment Q1 Review – Restructured Assets At 5.4%; Asset Quality To Improve: IDBI Capital

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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.

Click on the attachment to read the full report:

IDBI Capital Cholamandalam Investment Q1FY22 Result Update.pdf


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