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Cholamandalam Investment & Finance Company Ltd

| Q3 FY26 Earnings Conference Call Transcript

NEUTRAL SENTIMENT

Report Source

⬤23rd Dec 25

Summary : Management strongly refutes allegations, reassures investors of robust financial health and compliance, and expects strong Q3 performance.

Management Perspective positive : Management reassured investors of robust financial health. Categorically rejected allegations as malicious and baseless. Committed to transparent communication with stakeholders.

Concall Report Analysis & Insights

Business Overview

  1. Caters to SRTOs and self-employed non-professionals.
  2. Offers mortgage, unsecured, and vehicle finance.
  3. Serves underserved segments in rural and semi-urban geographies.
  4. Operates across over 1,700 branches nationwide.

Future Growth Prospects

  1. No revision to past guidance; company will deliver as planned.
  2. INR1,700 crores of CCDs expected to convert, strengthening net worth.
  3. Anticipates a decent Q3, potentially better than the first half.
  4. Q3 and Q4 are typically strong for delinquency reduction.

Management Insights

  1. Allegations are malicious, baseless, and ulterior-motivated.
  2. Financial health, asset quality, and liquidity remain robust.
  3. All operations comply with laws and regulatory guidelines.
  4. Related party transactions are fully disclosed and at arm's length.
  5. Cash collections reduced to 15% from 50%; GNPAs verified by multiple audits.

Signs of Skepticism

  1. Management is assessing the motives behind the allegations.
  2. Unclear exact timing of the blog publication versus email notification.
  3. Discrepancy in RPT numbers attributed to different periods and regulatory definitions.
  4. AAA credit rating upgrade is an aspiration, not an assured timeline.

Risk Factors

  1. Malicious and baseless allegations from an agency.
  2. Potential damage to the company's reputation and interests.

Good To Know

  1. Current ratings are AA+ from ICRA, India Ratings, and CARE.
  2. Net worth increased over INR3,000 crores in FY25.
  3. Strong liquidity with INR14,900 crores cash as of Nov 30th.
  4. CAR at 19.79%, Tier 1 at 14.53% as of Nov 30th, 2025.
  5. MMS provides group consulting services on a no-profit model.

Key Drivers

  1. Robust financial health, asset quality.
  2. CCDs conversion to boost net worth.
  3. Potential AAA credit rating upgrade.
  4. Improved Q3 disbursements, lower delinquencies.

Key Analyst Discussions

Competitive Environment

  1. Cash collection practices are standard industry practice.
  2. Rating fees are in line with industry, sometimes lower.
  3. Engages with multiple insurance companies, not just Chola MS.

Market Trends & Consumer Behavior

  1. Borrowers are self-employed non-professionals, often dealing in cash.
  2. Cash collection reduced to 15% from 50% previously.
  3. Q3 and Q4 are typically strong for delinquency reduction.

Financial Highlights

  1. Queries on related party transaction numbers were addressed.
  2. Clarification on credit rating agency fees provided.
  3. Total borrowing is INR1,87,000 crores; rating fees are 0.01%.
  4. GNPAs are verified by multiple auditors and regulatory inspections.
  5. Q3 disbursements picked up, expecting a decent quarter.

Product Composition

  1. Lending categories include mortgage, unsecured, and vehicle finance.
  2. Provides accident, hospitalization, term, and health insurance.

Strategic Considerations

  1. Motive behind allegations being assessed; legal action considered.
  2. MMS's role pared down significantly since FY22.
  3. No plans to simplify related party structure, as beneficial.
  4. Contact points for clarification: Company Secretary and CFO.
Cholamandalam Investment & Finance Company Ltd (CHOLAFIN) Concall Report Analysis & Insights | Dhanarthi