Cholamandalam Q2 PBT grows 650% – Overall growth in Disbursements is higher by 53% over the corresponding Quarter of 2009-10

 

Chennai 27th October 2010: The Board of Directors of CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED met today and have approved the results for the quarter ended 30th September 2010.

During the quarter, Vehicle Finance disbursed Rs.1032.34 Cr.(as against Rs. 672.43 Cr. in Q2 of 2009-10) and Home Equity disbursed Rs. 299.79 Cr. (as against Rs 200.97 Cr. in Q2 of 2009-10). The corporate and mortgage finance product float grew to Rs. 591.51 Cr. as against Rs 391.06 Cr. in Q2 of 2009-10.

The asset financing verticals – represented by Vehicle finance, Home Equity and Business finance delivered a PBT before exceptional items of Rs. 84.80 Cr. for the Quarter as against Rs 15.48 Cr. in Q2 of 2009 – 10 recording a growth of 447%. On a YTD basis the PBT of the asset financing vertical was Rs. 155.06 crs as against Rs 10.94 Cr. for YTD 2009-10.

Profit Before Tax after providing for Loan losses in the residual Personal Loan portfolio and other adjustments was at Rs 40.23 Cr. as against a loss of Rs.37.64 Cr. in Q2 of 2009-10. For the half-year ended 30th September 2010, the Profit before tax for the period was Rs 63.62 Cr. as against a loss of Rs 32.57 Cr. for the period ending 30th Sep 2009.

Higher business volumes have required sourcing costs. As a result, expenditures for the quarter are higher than those for the corresponding quarter last year.

Personal Loan Portfolio

The aggregate receivables net of Provisions for the Personal Loan portfolio has come down to Rs.153 Cr. as on 30th September 2010 from Rs.669 Cr. as on 30th September 2009.

Infusion of Tier I & Tier II Capital

The Company made a preferential issue and allotment of 93,75,000 equity shares of Rs.10/- each at a premium of Rs.150/- per share to 6 institutional investors including International Finance Corporation (Washington), mobilizing a total equity capital of Rs.150 Cr. in October 2010. Post capital infusion, the paid up capital of the Company is Rs. 119.28 Cr. and the net worth of the Company is Rs 1066.03 Cr. respectively.

Further, the Company also arranged for issuance of perpetual debt of Rs 150 Cr. during the month of October 2010.

Considering the above infusions, the Capital Adequacy Ratio (CAR) of the Company has improved to 20.18%.

New branches

During the quarter, the Company expanded its operations to12 new locations and as on 30th September, 2010 the Company operates out of 220 locations as against 208 as on 30th June 2010.

Rating

The Company’s long term debt programme was rated ‘CARE AA’ (Double A) by Credit Analysis & Research Ltd. (CARE). The rating denotes high safety for timely servicing of debt obligations and such instruments carry very low credit risk. The Perpetual debt issuance was rated as A+ by ICRA and CARE.

Subsidiaries Performance

The Subsidiaries –Cholamandalam Securities Ltd. and Cholamandalam Distribution Services Ltd reported a PBT of Rs 0.08 Cr. and Rs 1.93 Cr. respectively against a PBT of Rs 0.17 Cr. and Rs 1.83 Cr. in the corresponding quarter 2009-10. Cholamandalam Factoring Ltd. another subsidiary reported a loss of Rs. 2.75 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 September 2010 is at Rs.281.69 Cr. as against Rs 197.93 Cr. for the same period last year and Consolidated profit before tax for the quarter was at Rs. 39.47 Cr. as against a loss of Rs 1.37 cr. during the same period last year.

Rs.crore

Particulars

Q2 2010-2011

Q2 2009-2010

YTD Sep 2010-11

YTD Sep 2009-10

Growth

Disbursements

1332 873

2578

1575

64%

Closing assets net of Provisions

(own assets)

6346 4549

6346

4549

39%

Managed assets net of provisions

7747 6054

7747

6054

28%

Profit Before Tax (Before Exceptional Items)

40.23 5.36

63.62

10.43

510%

Profit after tax

26.25 -28.03

42.03

-24.78

About 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 businesses including seven listed companies actively traded in NSE & BSE. Headquartered in Chennai, the major companies of the Group include Carborundum Universal Ltd., Cholamandalam Investment and Finance Company Ltd., 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, Groupe Chimique Tunisien, Winterthur Technology Group and Morgan Crucible. 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.