Chola H1 profit rises 43% as loan-loss ratio falls to 1.4%

Cholamandalam Investment and Finance Company Limited, referred to as Chola, reported H1 FY27 profit after tax of Rs 3,284 crore, up 43% year on year, while its loan losses and provisions ratio fell to 1.4% from 1.8%. Total assets under management reached Rs 2,48,045 crore at Q2 FY27, 25% above a year earlier.

How did Chola’s H1 FY27 profit rise?

Chola’s H1 FY27 profit after tax rose 43% to Rs 3,284 crore from Rs 2,291 crore in H1 FY26. The increase was recorded in both quarters: Q1 FY27 profit after tax was Rs 1,654 crore, up 46% from Rs 1,136 crore, while Q2 FY27 profit after tax was Rs 1,630 crore, up 41% from Rs 1,155 crore.

Chola’s Q2 FY27 profit was Rs 24 crore below its Q1 FY27 result, but each FY27 quarter exceeded its respective prior-year comparison. Net income margin increased to 8.0% in H1 FY27 from 7.8% in H1 FY26, while the expenses ratio was unchanged at 3.0%. Return on assets before profit before tax, or ROA-PBT, rose to 3.5% from 3.1%.

What drove Chola’s assets under management growth?

Chola’s total assets under management, or AUM, grew 25% year on year to Rs 2,48,045 crore at Q2 FY27 from Rs 1,99,159 crore at Q2 FY26. The rate was higher than the 22% growth reported between Q1 FY26 and Q1 FY27, when AUM reached Rs 2,33,586 crore. Total H1 FY27 disbursements rose 34% to Rs 65,484 crore from Rs 48,767 crore.

Vehicle Finance remained Chola’s largest portfolio, with AUM of Rs 1,29,787 crore at Q2 FY27, or 53% of total AUM. Its share declined from 54% at Q2 FY26 even as its AUM increased from Rs 1,07,568 crore. Loan Against Property retained a 23% AUM share, rising to Rs 57,447 crore from Rs 46,302 crore over the same comparison.

The portfolio mix also changed in disbursements. Vehicle Finance provided Rs 34,304 crore, or 52%, of H1 FY27 disbursements, compared with a 55% share in H1 FY26. Consumer and Small Enterprise Loan disbursements rose to Rs 7,747 crore from Rs 4,188 crore and represented 12% of the total, versus 9%; Gold disbursements increased to Rs 2,714 crore from Rs 567 crore and its share rose to 5% from 1%.

Did Chola’s loan-loss and asset-quality metrics improve?

Chola’s loan losses and provisions ratio improved to 1.4% in H1 FY27 from 1.8% in H1 FY26. The ratio was 1.5% in Q1 FY27 and declined to 1.4% in Q2 FY27, compared with 1.7% in Q2 FY26. Vehicle Finance reported a separate loan-loss and provisions ratio of 1.8% in H1 FY27, down from 2.1% in H1 FY26.

Gross Stage 3 assets fell to 3.25% at September 2026 from 3.35% at September 2025, while net Stage 3 assets declined to 1.78% from 1.90%. Expected credit loss, or ECL, provisions were 1.47% at September 2026, compared with 1.45% a year earlier. Provision coverage increased to 45.32% from 43.23% over the same period.

The sequential picture included both improvement and movement in coverage. Gross Stage 3 assets declined from 3.29% at June 2026 to 3.25% at September 2026, while net Stage 3 assets remained at 1.78%; provision coverage decreased from 45.73% to 45.32%. Gross Stage 2 and 3 assets together were 5.93% at September 2026, below 6.43% a year earlier, and net Stage 2 and 3 assets were 4.25%, down from 4.73%.

How did Chola’s returns and net worth change?

Chola’s return on equity increased to 20.3% in H1 FY27 from 18.5% in H1 FY26, alongside the increase in ROA-PBT to 3.5% from 3.1%. H1 FY27 earnings per share were Rs 76.8, compared with Rs 54.3 a year earlier. These ratios were reported with H1 FY27 profit after tax of Rs 3,284 crore.

Total net worth was Rs 34,474 crore at Q2 FY27, 33% above Rs 25,895 crore at Q2 FY26. Reserves and surplus increased to Rs 34,303 crore from Rs 25,726 crore, while equity share capital rose to Rs 172 crore from Rs 168 crore. Chola stated that Q2 FY27 net worth included conversion of Rs 2,000 crore of compulsorily convertible debentures, or CCDs.

At a stock price of Rs 1,616 as of September 30, 2026, Chola reported an H1 FY27 price-to-earnings ratio of 21.0 and a price-to-book-value ratio of 4.0. The corresponding H1 FY26 ratios were 29.6 and 5.3. Under revised Reserve Bank of India norms, Chola also disclosed gross non-performing assets of 4.44% and net non-performing assets of 2.92% at September 2026.

Conclusion

Chola’s H1 FY27 result combined 43% growth in profit after tax, 25% growth in Q2 AUM and a 0.4-percentage-point reduction in the half-year loan losses and provisions ratio. Vehicle Finance remained the largest business at 53% of AUM, while Consumer and Small Enterprise Loan and Gold accounted for larger proportions of H1 disbursements than a year earlier.

The next disclosures will show whether the 1.4% loan losses and provisions ratio and 45.32% Stage 3 provision coverage are maintained as AUM expands. They will also provide a further basis to assess net-worth comparisons after the Rs 2,000 crore CCD conversion included in Q2 FY27 net worth.