Chola FIN Q3 FY26: Disbursements up 16%, PAT 19%

Key takeaway from the quarter

Cholamandalam Investment & Finance Company Ltd (Chola FIN), the Murugappa Group’s financial services arm, reported steady growth in its operating and profitability metrics for Q3 FY26. Aggregate disbursements in the quarter rose to ₹29,962 crore, up 16% year-on-year (YoY). Assets under management (AUM) increased to ₹2,27,770 crore, up 20% YoY, showing continued balance-sheet expansion.

Profitability also moved higher, with net profit (PAT) for Q3 FY26 at ₹1,288 crore, up 19% YoY. The quarter’s reported trends point to improvement in margins and stable operating costs, alongside marginally better credit costs.

Q3 FY26 business momentum: disbursements and AUM

The company’s Q3 FY26 disbursements of ₹29,962 crore indicate sustained demand across its financing franchises. Management commentary in the provided data also flagged positive momentum in heavy commercial vehicles (HCV), light commercial vehicles (LCV), and passenger vehicle segments. It also noted that construction equipment and tractor outlook remained strong.

AUM growth to ₹2,27,770 crore (20% YoY) was a key headline because it captures both disbursement strength and the company’s ability to scale while maintaining collections. The update also stated that Q4 is expected to show improved performance, with positive trends in disbursements and collections.

Income and margin profile: NII growth outpaces income

Chola FIN’s total income for Q3 FY26 was ₹7,985 crore, up 17% YoY. Net interest income (NII) grew faster, at ₹4,342 crore, up 23% YoY. This gap between income growth and NII growth typically signals either improving yields, better funding mix, or both, and it aligned with the company’s margin commentary for the quarter.

Net interest margin (NIM) improved by 33 basis points (bps) YoY in Q3, while the net income margin was reported at 8.0%. The company also maintained its guidance that NIMs are expected to hold at current levels barring macro shocks.

Profitability: higher PBT and PAT in Q3 FY26

For Q3 FY26, profit before tax (PBT) was ₹1,733 crore, up 18% YoY. PAT was ₹1,288 crore, up 19% YoY. The company’s operating expenses were reported as steady YoY, even after factoring in the impact of the new labour code, which helped protect operating leverage.

Credit costs improved marginally, with vehicle finance credit costs described as stabilised at 2%. While the data does not quantify total provisioning, the direction of change matters because credit cost volatility is a key swing factor for lender earnings.

Guidance and near-term expectations

Chola FIN maintained AUM growth guidance of 20% to 22% for FY26. This is consistent with the reported Q3 AUM growth of 20% YoY. The company also indicated Q4 is expected to improve, supported by positive trends in disbursements and collections.

Another capital-related point in the update was that further CCD conversions are expected to improve Tier I capital in March 2026. While the data does not quantify the amount of CCD conversions, the timing reference is relevant for capital tracking.

What earlier FY26 data indicates: Q2 and H1 context

The provided information also includes Q2FY26 and H1FY26 operating metrics. Aggregate disbursements in Q2FY26 were ₹24,442 crore, and ₹48,646 crore in H1FY26. AUM stood at ₹2,14,906 crore as of 30 September 2025, compared with ₹1,77,426 crore as of 30 September 2024, representing 21% YoY growth.

In the same Q2FY26 update, secured business and personal loan (SBPL) disbursements were ₹385 crore in Q2FY26 and ₹744 crore in H1FY26. SBPL AUM was ₹2,932 crore as of 30 September 2025 versus ₹1,863 crore a year earlier, up 57% YoY.

Asset quality and liquidity snapshot from September 2025

The Q2FY26 data provides a clear asset quality and liquidity picture as of September 2025. Stage 3 assets (90+ dues) were at 3.35% as of September 2025 versus 3.16% at the end of June 2025. Gross NPA (GNPA) as per RBI norms was 4.57% as of September 2025 compared with 4.29% in June 2025.

On liquidity, the company reported a cash balance of ₹16,991 crore at the end of September 2025, including HQLA of ₹6,661 crore in government securities, SDLs, T-bills and strips held for LCR compliance. Total liquidity was ₹17,516 crore, including undrawn sanctioned lines. It also said ALM was comfortable with no negative cumulative mismatches across all time buckets.

FY25 base: scale-up, profitability and dividend

For the quarter ended March 2025 (Q4 FY25), the company reported consolidated PAT of ₹1,259.54 crore, up 18% from ₹1,065.23 crore. Consolidated total income for Q4 FY25 was ₹7,136.91 crore, up from ₹5,499.16 crore in the year-ago quarter.

For FY25, consolidated PAT rose to ₹4,262.70 crore from ₹3,420.06 crore. Consolidated total income increased to ₹26,152.76 crore from ₹19,419.87 crore, a 35% rise. Disbursements in Q4 FY25 increased 7% to ₹26,417 crore, and full-year disbursements crossed ₹1,00,869 crore, up 14% YoY. AUM as of March 31, 2025 stood at ₹1,99,876 crore, up 30% from ₹1,53,718 crore.

Capital ratios reported for March 31, 2025 showed a capital adequacy ratio (CAR) of 19.75% versus the 15% regulatory requirement. Tier I capital was 14.41% and Tier II was 5.34%, while CET I was 13.68% (regulatory minimum 9%). The board recommended a final dividend of ₹0.70 per share (35%) in addition to an interim dividend of ₹1.30 per share (65%) for FY25.

Key numbers at a glance

Why the update matters for investors

The Q3 FY26 numbers show that Chola FIN’s growth is still being driven by higher disbursements and a 20% YoY AUM expansion, while profitability is being supported by stronger NII growth and an improved NIM. Steady operating expenses YoY also matters because cost discipline can amplify the benefit of NII growth for a lender.

At the same time, the Q2FY26 asset quality indicators show a rise in Stage 3 and GNPA between June 2025 and September 2025, making collections and credit costs a key monitorable. The company’s stated liquidity position and ALM comfort provide additional context on balance sheet resilience.

Conclusion

Chola FIN’s Q3 FY26 performance combined higher disbursements, 20% YoY AUM growth, and 19% YoY profit growth, backed by a 33 bps YoY improvement in NIM and steady operating costs. The company has maintained FY26 AUM growth guidance of 20% to 22% and expects Q4 to improve on disbursements and collections, while CCD conversions are expected to support Tier I capital in March 2026.