Cholamandalam posts 25 per cent growth in disbursements in core products

Chennai, January 2, 2005: Cholamandalam Investment and Finance Company Limited (Cholamandalam) has, in the first nine months of 2004-05, posted a growth of 25 per cent in disbursements of its core automobile finance products, viz., commercial vehicles, cars and multi-utility vehicles. Total disbursements for the period were at Rs.800 crores. The company's gross asset base (including assets securitised) grew by 13 per cent to Rs.1860 crores.

The Profit Before Tax (PBT) was Rs.38.6 crores as compared to Rs.36.3 crores for the same period in the previous year.

Mr. M Anandan, Managing Director said, "Despite the overall scenario of rising interest rates, there has been no increase in lending rates in the auto finance market. While we expect this situation to correct itself, we have been actively taking steps to grow disbursements, cut costs and manage the product-mix for optimum yield."

Thus, the disbursements in core products in the period October to December were 35 per cent higher than in the previous year. Total origination and operating costs for the same three month period dropped from Rs.13.45 crores in the previous year to Rs.10.86 crores in the current year - a cost reduction of 20 per cent.

Mr Anandan added, "We have been continuing to manage our liabilities dynamically and innovatively. This, along with focused marketing and rigorous cost management, leaves Cholamandalam well-positioned to leverage the growth in the sale of automobiles in the country."

Cholamandalam offers automobile finance in 120 locations across India. The Company's capital adequacy ratio stands at a healthy 18.6 per cent as against RBI's requirement of 12 per cent.

About Cholamandalam Investment and Finance Company Limited
Cholamandalam Investment and Finance Company Limited (Cholamandalam) along with its subsidiaries and affiliates offers individual and institutional customers a range of financial services - automobile finance, capital market finance, general insurance, mutual funds, securities broking, distribution of investment and insurance products and risk management. Cholamandalam shares are listed on Bombay (BSE) and National (NSE) stock exchanges.

Cholamandalam is part of the Rs.5200 crore (US $ 1 billion) Murugappa Group, a pioneer and market leader in several fields with manufacturing facilities across 12 states. The Murugappa Group has a strong presence in abrasives, engineering, bio-products, sanitary ware, sugar, farm inputs, plantations and nutraceuticals. Companies in the Group include Carborundum Universal, Coromandel Fertilisers, EID Parry and TI of India.

Disclaimer: Some of the statements included in this Press Release may be forward looking statements made based on management's current expectations and beliefs concerning future developments and their potential effects upon Cholamandalam and its subsidiaries. There can be no assurance that future developments affecting Cholamandalam and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are important factors that could cause actual results to differ, possibly materially, from expectations reflected in such forward-looking statements. Cholamandalam does not intend, and is under no obligation, to update any particular forward-looking statement included in this Press Release.

For further information, please contact:
Mr. M. Anandan
Managing Director
Cholamandalam Investment and Finance Company Limited
I Floor, Dare House
Parry's Corner
2, NSC Bose Road, Chennai 600 001.
Tel: 25307172