Cholamandalam Q1 Operational PBT grows 142% – Disbursements higher by 77% over the corresponding Quarter of 2009-10

 

Q1 Performance Highlights

Chennai, July 28, 2010: Overall buoyancy in the economy led by the surge in the Commercial Vehicles industry helped the company to maintain the growth momentum and post an impressive performance in Q1.

Rs. crore

Particulars Q1 2010-2011 Q1 2009-2010 Growth
Disbursements 1246 702 77%
Managed assets net of provisions 7220 6042 20%
Operational profit 12.12 5.07 140%
Profit after tax 15.78 3.25 385%

Vehicle finance disbursed Rs 952 Cr. (as against Rs 511 Cr. in Q1 of 2009-10) and Home Equity disbursed Rs 294 Cr. (as against Rs 191 Cr. in Q1 of 2009-10). The corporate and mortgage finance product float grew to Rs 535 Cr. as against Rs 357 Cr. in Q1 of 2009-10.

The asset financing verticals – represented by Vehicle finance, Home Equity and Corporate and mortgage finance delivered a PBT of Rs 45 Cr. for the Quarter as against Rs 3 Cr. in Q1 of 2009 – 10.

Other income of Rs 11 Cr. represent Profit on sale of certain assets which, post sale, were taken under an operational lease.

Profit Before Tax, after providing for Loan losses in the residual Personal Loan portfolio and other adjustments was higher at Rs 23.39 Cr. as against Rs 5.07 Cr. in Q1 of 2009-10.

The Gross income for this quarter was lower on account of reduction in personal loan book. Interest income on personal loan book was Rs27 Cr. in Q-1 of 2010-11 as against Rs.92 Cr. in Q-1 of 2009-10. Expenditure for the Quarter are higher than the corresponding quarter of previous year due to (1) One time pay out in respect of Salaries coupled with higher one time provisioning towards Gratuity (2) higher sourcing costs due to higher volume of business transacted.

Personal Loan Portfolia

The aggregate receivables net of Provisions outstanding in the Personal Loan portfolio as on 30-6-2010 have further come down to Rs 203 Cr. ( Rs 1123 Cr. as on 30-6-2009)

During the quarter the joint venture with DBS Bank Ltd., (DBS) was terminated and the entire stake of 37.48% held by DBS was acquired by the Murugappa Group. All the formalities post termination of the joint venture including the name change has been completed during the quarter.

Allotment of Share Capital

The allotment of shares arising out of preferential issue of shares aggregating to Rs.100 Cr. was completed during the quarter alongside conversion of the fully convertible preference shares (FCCPS) of Rs.300 Cr. issued to the promoters. The paid up capital of the Company and the net worth of the Company as on 30th June 2010 is at Rs. 110 Cr. and Rs 899 Cr. respectively.

Further, the Company raised subordinated debt of Rs 111 Cr. during the quarter which helped the Company maintain a healthy CAR of 15.78% during the quarter ended 30th June 2010.

New Branches

During the quarter, the Company expanded its operations to 37 new locations and as on 30th June, 2010 the Company operates out of 208 locations as against 171 as on 31st March 2010.

Rating

During the quarter Fitch Ratings revised the outlook on the National Long Term Rating for the Company’s subordinated debt programme from negative’ to ‘stable’.

Subsidiaries Performance

The Subsidiaries -Cholamandalam Securities Ltd. and Cholamandalam Distribution Services Ltd reported a PBT of Rs 0.19 Cr. and Rs 1.70 Cr. respectively against a PBT of Rs1.04 Cr. and Rs 0.85 Cr. in the corresponding quarter 2009-10. Cholamandalam Factoring Ltd. the recent subsidiary reported a loss of Rs.2.11 Cr. as against a profit of Rs.0.01 Cr. in the corresponding quarter 2009-10.

Consolidated Performance

Consolidated income from operations for the quarter ended 30th June 2010 is at Rs. 259.41 Cr. as against Rs.244.95. Cr. for the same period last year and Consolidated profit before tax for the quarter was at Rs.23.17 Cr. as against Rs.1.63Cr. during the same period last year.

Capital Infusion

With a view to augment the net worth of the Company required for the proposed growth in business as well as to further strengthen the capital adequacy ratio of the Company, the Board at its meeting held today also approved the following capital infusion proposals:

  • An issue of Equity shares/securities equivalent thereto in one or more tranches upto Rs.150 crores by way of preferential allotment and/or Qualified Institutional Placement in accordance with the SEBI (Issue of Capital & Disclosure Requirements), Regulations, 2009 and

  • An issue of redeemable cumulative preference shares up to Rs.100 crores on a private placement basis to one or more investors.

About Cholamandalam

Cholamandalam Investment & Finance Company Limited (CIFCL) was incorporated in 1978 as the financial services arm of the Murugappa Group. In 2005, post the joint venture partnership between the Murugappa Group and DBS Bank Limited, Singapore, the Company was renamed as Cholamandalam DBS Finance Limited. Consequent to termination of joint venture with DBS in 2010, the Company has reverted to its original name CIFCL. The Company that commenced business as an equipment financing company has now emerged as a comprehensive financial services solution provider that offers vehicle finance, business finance, home equity loans, stock broking and distribution of financial products to its customers The Company operates from over 200 branches across India with an asset under management of about Rs8546 Crores. The subsidiaries of CIFCL include Cholamandalam Securities Limited, Cholamandalam Distribution Services Limited and Cholamandalam Factoring Limited.

About the Murugappa Group

Founded in 1900, the Rs. 13617 Crores (USD 3.03 billion) Murugappa Group is one of India’s leading business conglomerates. The Group has 29 companies under its umbrella, of which seven are listed and actively traded in NSE & BSE. Headquartered in Chennai, the major companies of the Group include Carborundum Universal, Cholamandalam Investment and Finance Company Limited, Cholamandalam MS General Insurance Company Ltd, Coromandel International Ltd, Coromandel Engineering Company Ltd, EID Parry (India) Ltd, Parry Agro Industries Ltd, Tube Investments of India Ltd and Wendt (India) Ltd.

Market leaders in served segments including Abrasives, Auto Components, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Construction, Bio-products and Nutraceuticals, the Group has forged strong joint venture alliances with leading international companies like Mitsui Sumitomo, Foskor, Cargill and Groupe Chimique Tunisien. The Group has a wide geographical presence panning 13 states in India and 5 continents.

Renowned brands like BSA, Hercules, Ballmaster, Ajax, Parry’s, Gromor and Paramfos are from the Murugappa stable.

The organization fosters an environment of professionalism and has a workforce of over 32,000 employees.