Cholamandalam Investment and Finance Company Ltd president and CFO Arul Selvan said that the NBFC’s advances in two-wheelers and passenger cars segments went up in October after the GST rationalisation in September.
Without revealing the exact numbers, Selvan said, “We have seen an uptick in vehicle loans after the GST cuts for October. The larger impact of GST cuts on increase in vehicle loans will be known when Q3 results are out. Moreover, the benefits of GST cuts on advances will be seen in the sale of two-wheeler, passenger cars or consumer durable products. It will not happen where people are investing in assets which are for productive purpose.”
The recent reports said that the major automobile companies witnessed a sharp rise in sale of passenger cars and two-wheelers due to GST rationalisation ahead of festive season of Dussehra and Diwali. The NBFC reported a 20% rise in net profit from Rs 963 crore in Q2 FY25 to Rs 1,155 crore in Q2FY6 year-on-year basis.
The CFO attributes the growth in profits to the rise mortgage businesses such loan against property (LAP), housing loans and secured business & personal loan (SBPL) and to a certain extent advances to MSMEs during the quarter. The housing loans grew to Rs 20,405 crore in Q2FY26 against Rs 15,892 crore in Q2FY25. LAP grew from Rs 34,824 crore to Rs 46,302 crore in Q2FY25 and SBPL advances grew to Rs 7544 crore in the Q2 FY25. Loans to MSMEs increased to Rs 2,932 crore in Q2FY26. The total asset under management (AUM) in Q2FY26 stood at Rs 1,99,159 crore.
He also said that the company is not any selling its products on fintech platforms and has developed its own application. Selvan added that the app is being used only in limited circle and it is available to known customers. The NBFC’s net performing asset (NPA) is at 3.07% in Q2FY26 compared to 2.48%. Selvan said, “NPA will come down in Q3 and Q4 because this is the time of festival season and the scope for borrowers to earn increases as compared to Q2 because of monsoon season, and the vehicle operators also don’t find enough employment opportunities during this time. So, NPA will come down in the next quarters.”
Selvan said the AUM and profitability will grow at 20% to 22% for the current financial year. With the Chennai-based NBFC employing over 60,000 people across the country, the CFO said that they will continue to recruit people for its sales and collection teams. “As the productivity of the company increases, there will be recruitment happening. As digital business is the main focus and technology upgrade is needed for the same, the employment opportunity will continue to see an uptick.” Selvan also said the company is experimenting with artificial intelligence (AI), but the implementation of it into the business will take time.