CHOLAHLDNG - Chola Financial

📊 NSE: CHOLAHLDNG 🏢 Finance & Investments 📅 Last Updated: 12/13/2025 21:04

💰 Financial Performance

Revenue Growth by Segment

Standalone income, primarily from dividends, grew marginally to INR 86.20 Cr in FY25 from INR 86.00 Cr. Consolidated PBT grew 22.9% YoY to INR 6,405.46 Cr. CIFCL (associate) disbursements grew 14% in H1 FY26 to INR 9,336 Cr. CMSGICL (insurance) Gross Written Premium grew 13.5% to INR 8,564 Cr in FY25.

Geographic Revenue Split

The group operates through 1,16,663 locations globally with a presence in 50 countries, though the primary revenue contribution is from the Indian market via its financial services and insurance subsidiaries.

Profitability Margins

Consolidated Net Profit attributable to owners grew 22.6% to INR 2,173.66 Cr in FY25. Standalone PBT margin remains high at 95.8% (INR 82.57 Cr PBT on INR 86.20 Cr income). CMSGICL PBT margin was 7.6% (INR 650 Cr on INR 8,564 Cr GWP).

EBITDA Margin

Not applicable for a holding company; however, CIFCL PBT grew 42% in H1 FY26 to INR 836 Cr, and CMSGICL PBT grew 10.2% in FY25 to INR 650 Cr, indicating strong core profitability in subsidiaries.

Capital Expenditure

Not disclosed as a specific figure for the holding company; however, the group manages an investment portfolio of INR 1,290.72 Cr as of March 31, 2025, up from INR 1,279.31 Cr.

Credit Rating & Borrowing

The company maintains a leverage ratio of 0.0002, significantly below the regulatory maximum of 2.50, indicating minimal borrowing. CIFCL and CMSGICL monitor credit ratings of banks and financial institutions for their investment portfolios.

⚙️ Operational Drivers

Raw Materials

Not applicable for financial services; the primary 'raw material' is capital and cost of funds for lending and claims/commissions for insurance.

Import Sources

Not applicable.

Key Suppliers

Not applicable.

Capacity Expansion

The group workforce exceeded 48,400 employees as of March 31, 2025. CIFCL is expanding its retail momentum and rural demand focus. CMSGICL is targeting growth in non-motor segments following the end of the 1/n accounting base effect.

Raw Material Costs

Insurance claims and commissions are key costs; CMSGICL reported an 83% loss ratio in the Own Damage (OD) function, which they aim to reduce by 5% in H2 FY26 through commission cuts and core business optimization.

Manufacturing Efficiency

CIFCL loan losses were maintained at 0.3% in H1 FY26. CMSGICL Expense of Management (EOM) stood at 30.5% for H1 FY26, lower than the board-approved glide path.

Logistics & Distribution

Distribution is handled through 1,16,663 locations and a massive workforce of 48,400+ employees to drive retail momentum.

📈 Strategic Growth

Expected Growth Rate

16-23%

Growth Strategy

Growth will be driven by the LAP segment (expected to grow 21-23% in FY26) and NBFC retail (16-18%). CMSGICL expects visible growth from Q3 FY26 as the 1/n reporting base effect ends. CIFCL will focus on retail momentum, rural demand, and portfolio quality in the LCV segment (which grew 14% in Q2 FY26).

Products & Services

Insurance policies (Motor, Health, Property, Accident, Engineering, Liability, Marine, Travel, Crop), Vehicle Finance, LAP (Loan Against Property), SME loans, CSEL (Consumer & Small Enterprise Loans), SBPL (Secured Business & Personal Loans).

Brand Portfolio

Cholamandalam, Chola MS, Payswiff, Murugappa Group.

New Products/Services

Expansion into CSEL and SBPL segments; CMSGICL is focusing on long-term non-motor products which received INR 202 Cr in advance premium in H1 FY26.

Market Expansion

Focus on sustaining retail momentum and leveraging rural demand in India; geographical presence already spans 50 countries via the Murugappa Group.

Market Share & Ranking

CMSGICL holds a 5.3% market share in the motor insurance segment.

Strategic Alliances

Joint Venture with Mitsui Sumitomo Insurance Company Limited (Japan) for CMSGICL; Payswiff Technologies Private Limited is a subsidiary.

🌍 External Factors

Industry Trends

The NBFC retail segment is moderating to 16-18% growth from 29% previously. The LAP segment is outperforming at 31% growth in FY25. Insurance is shifting toward long-term non-motor products and adjusting to 1/n accounting methods.

Competitive Landscape

Competes with other NBFCs and private general insurers; faces competition in the motor insurance segment where IDV changes due to GST are impacting new business pricing.

Competitive Moat

Strong brand equity of the Murugappa Group (125 years of existence) and a massive distribution network (113 manufacturing locations, 1.16 lakh+ touchpoints). The high Capital Ratio (1999.12%) provides a significant buffer against market volatility.

Macro Economic Sensitivity

Highly sensitive to interest rate cycles affecting NBFC margins and infrastructure spending which drives the 14% growth in LCV segments.

Consumer Behavior

Increasing property ownership and a rising middle class are driving the 21-23% expected growth in the LAP segment.

Geopolitical Risks

Exposure to global market trends through the Murugappa Group's 50-country presence, though financial services are primarily Indian-regulated.

⚖️ Regulatory & Governance

Industry Regulations

Complies with RBI Master Directions for Core Investment Companies (CICs) and IRDAI regulations for insurance. IRDAI has deferred Ind-AS implementation for insurance, requiring conversion for consolidation.

Environmental Compliance

The group emphasizes energy conservation and safety/well-being of its 48,400+ employees.

Taxation Policy Impact

Consolidated tax expense was INR 1,665.58 Cr in FY25 on a PBT of INR 6,405.46 Cr, representing an effective tax rate of approximately 26%.

Legal Contingencies

Monitors compliance risk to avoid legal penalties and financial forfeiture; specific pending court case values are not disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Volatility in share price and potential downgrades in credit ratings of investee banks. Loss of brand fee income and deterioration in stakeholder relationships (Reputation Risk).