Cholamandalam Financial Holdings Ltd announces earnings for Q4, FY2020

The Board of Directors of Cholamandalam Financial Holdings Ltd (CFHL) today approved the audited financial results for the quarter and year ended March 31, 2020.

Consolidated Results

For the year ended March 31, 2020, the Company has achieved consolidated Profit after tax of Rs. 1,165 Cr. as against Rs.1,415 Cr. in the previous year. Drop in Profit after tax is due to one time impairment provision of Rs 504 Cr. on loans to cover contingencies due to COVID-19 and related macro economic conditions and remeasurement of deferred tax asset consequent to reduction in Income Tax Rate during the year.

Cholamandalam Investment & Finance Company Ltd, in which the Company holds 45.50% stake, disbursed Rs. 29,091 Cr. for the year ended March 31, 2020 compared to Rs. 30,451 Cr. in the previous year. Due to the wide-spread Covid-19 pandemic, government had announced a lock-down of all businesses and all activities effective 24th March 2020 which severely impacted disbursements.of Q4. Disbursements which were already registering a slow growth till Dec 19 (9% growth YTD Dec) suffered resulting in a drop of 4% for the year over FY 19.

Profit after tax for the year is at Rs. 1,052 Cr. after creation of one-time provision of Rs. 504 Cr to cover contingencies due to COVID-19 and Macro economic factors. On a comparable basis, Profit after tax for the year ended March 31, 2020 is at Rs. 1,387 Cr before one-time provision of Rs.504 Cr to cover contingencies due to COVID-19 and Macro, as against Rs. 1,186 Cr last year, registering a growth of 17%.

Total Assets under management grew by 16% at Rs. 66,943 Cr as compared to Rs.57,560 Cr in FY19.

Cholamandalam MS General Insurance Company Ltd., a subsidiary in general insurance business, in which the Company holds about 60% stake, registered a Gross Written Premium (GWP) of Rs. 4,824 Cr. during the year as against Rs. 4,552 Cr. in FY19, a growth of 6%. Profit after tax for the year was at Rs. 125 Cr. as against Rs. 198 Cr. in FY19. Drop in Profit after tax is on account of remeasurement of deferred tax asset consequent to reduction in Income Tax Rate for the year.

Cholamandalam MS Risk Services Ltd., a Joint Venture Company, in which the Company holds 49.5% stake, registered a revenue of Rs. 46.29 Cr. for the year as against Rs. 40.82 Cr. in FY19. Profit after tax for the year was at Rs. 4.09 Cr. as against Rs. 3.53 Cr. in FY 19.

Standalone Results

The Profit after tax for the year is at Rs. 83.33 Cr. as against Rs. 66.53 Cr. in FY19, a growth of 25%.

Dividend

The Board of Directors, at their meeting held on February 26, 2020 had declared interim dividend of Rs.0.65 per equity share of the face value of Re.1/- each, for FY 20. The Board of Directors have recommended the same to be confirmed as final dividend for FY 20.

Shares of Cholamandalam Financial Holdings Ltd was last trading in BSE at Rs.276.25 as compared to the previous close of Rs. 283.35. The total number of shares traded during the day was 1676 in over 225 trades.

The stock hit an intraday high of Rs. 292 and intraday low of 275.45. The net turnover during the day was Rs. 474583.

Source : Equity Bulls

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