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Cholamandalam Investment and Finance Company Limited
Disbursement up by 34%, PBT up by 168% - turnaround performance

Q -1 Performance Highlights

Chennai, July 28, 2011: Q1 has been a good quarter for Cholamandalam Investment and Finance Company Limited, a part of USD 3.8 billion Murugappa Group. Disbursements in vehicle finance assets continued to be robust and grew 37% compared to the same period last year. Home equity loans grew 26% compared to the same period last year. For the quarter, net credit losses for the vehicle finance business was 0.33% of average assets and for home equity business was 0.24% of average assets.

The Company disbursed Rs.1302 Cr. (as against Rs.951 Cr. in Q-1 of 2010 - 11) in vehicle finance assets and disbursed Rs.370 Cr. (as against Rs.294 Cr. in Q-1 of 2010 - 11) by way of home equity loans. The aggregate disbursements of the Company for the quarter is Rs.1672 Cr. (as against Rs.1245 Cr. in Q-1 of 2010 - 11) registering a growth of 34%.

Gross income from operations was Rs.360 Cr. compared to Rs.261 Cr. in Q -1 of 2010 -11 registering a growth of 38%. Profit before tax is Rs.62.70 Cr. as against Rs.23.39 Cr. in Q - 1 of 2010 -11 registering a growth of 168%.

Exceptional Items for the quarter of Rs.22 Cr. represents the net difference between impairment provision on investments made in Subsidiary - Cholamandalam Factoring Limited to an extent of Rs.55.00 Cr. net of reversal of provisions.

Financial performance - Summary

  • Balance Sheet (Business assets are shown net of provisions) 

  • During the quarter, the Company got reclassified as Asset Financing Company (AFC) as per RBI regulations

  • The Company has expanded its presence to 324 branches as on 30th June 2011. Most of the new branches opened during the quarter are in Tier II and Tier III locations across India.

  • The Company raised Tier II capital of Rs. 181 Cr. during the quarter in the form of perpetual debt instrument and subordinated debt.

Subsidiaries Performance:

The wealth management business constituting of Chola Securities and Chola Distribution Services had made a loss of Rs.0.70 Cr. compared to a profit of Rs.1.89 Cr. in Q – 1 of FY – 11.

During the quarter, Chola invested Rs.55 Cr. as share capital in Cholamandalam Factoring Limited as it had made a loss before tax of Rs.57 Cr compared to a loss of Rs.2.10 Cr. in Q -1 of FY -11. The entire investment was completely provided for in the books of the parent Company.

Consolidated Results

The consolidated profit after tax for the period ended June 2011 was Rs.32.36 Cr. as against a PAT of Rs.15.46 Cr. in the previous year.

About the Murugappa Group

Founded in 1900, the Rs. 17051 Crores (USD 3.8 billion) Murugappa Group is one of India's leading business conglomerates. The Group has 29 businesses including eight 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., E.I.D. 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 Groupe Chimique Tunisien, Foskor, Cargill, Mitsui Sumitomo and Morgan Crucible. The Group has a wide geographical presence spanning 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.

For further information, please contact:

Vinitha Charles
Deputy Manager, Group Corporate Communications
Murugappa Group
Mobile: 9677196711

Vinod Kumar /Diya Kinger
Ogilvy Public Relations Worldwide
Mobile: 98401 26179 / 8939623044

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