Cholamandalam Investment and Finance Company Ltd (NSE: CHOLAFIN) continues to demonstrate a robust growth trajectory, underpinned by its 125-year legacy within the Murugappa Group and a strategic focus on financial inclusion across India. As of December 2025, the group boasts a consolidated turnover of 10.2 billion and a market capitalization of 49.15 billion, reflecting its dominant standing in the financial services sector.
Performance by Business Vertical and Year-Over-Year Context
Chola reported a strong performance for the quarter ended December 31, 2025, with Total Assets Under Management (AUM) reaching ₹2,27,770 Cr, a 20% year-over-year (YoY) growth.
• Vehicle Finance (VF): Remaining the cornerstone of the business, VF disbursements grew by 17% in Q3 FY26 to ₹16,805 Cr. The segment’s AUM stands at ₹1,12,937 Cr, driven by a sequential recovery in heavy commercial vehicles and record-high sales in passenger vehicles.
• Loan Against Property (LAP): This vertical saw a significant 26% jump in disbursements in Q3 FY26, with AUM growing by 31% YoY to ₹49,162 Cr.
• Home Loans (HL): Benefitting from government “housing for all” initiatives, HL AUM grew by 27% YoY, reaching ₹21,691 Cr.
• MSME Ecosystem (SME & SBPL): The MSME segment continues to scale rapidly, with AUM growing 32% YoY to ₹60,722 Cr.
Operational Scale and Market Leadership
Chola’s market leadership is fortified by its expansive operational scale, featuring 1,757 branches across 26 states and 7 Union Territories. Critically, 92% of these locations are situated in Tier-III, Tier-IV, Tier-V, and Tier-VI towns, positioning the company as a leader in reaching under-penetrated rural and semi-urban markets.
Core Growth Strategies and Strategic Expansion
The company’s growth is driven by three primary strategies:
1. Digitization: Chola has implemented a “Digital Super Cycle,” including a digitized Loan Origination System (LOS) and the “Chola One” super-app, envisioned as a one-stop-shop for all financial products.
2. Product Diversification: Strategic expansion into new lines, such as the Gold Loan business launched in 2025, and a focus on the used vehicle marketplace via the GaadiBazaar platform.
3. Data Analytics: Utilizing AI/ML-based scoring models and predictive analytics to refine underwriting and collection strategies.
Robust Capital Strength and Regulatory Milestones
Chola maintains a robust capital position with a Capital Adequacy Ratio (CAR) of 19.16%, well above the RBI mandate of 15%. Tier I capital stands at 14.21%. While Gross NPA (as per revised RBI norms) was reported at 4.63% for Q3 FY26, the company maintains a strong Stage 3 provision coverage ratio of 43.03%. Management commentary highlights that the conversion of Compulsorily Convertible Debentures (CCDs) will further bolster Tier I capital in early 2026.
Shareholder Value and Growth Trajectory
The company remains committed to delivering consistent shareholder value. Profit After Tax (PAT) for Q3 FY26 was ₹1,288 Cr, a 19% YoY increase. Chola has maintained a dividend rate of 100% consecutively since FY21. The Basic Earnings Per Share (EPS) for YTD Dec 25 stands at ₹56.4, compared to ₹47.3 the previous year.
Future Outlook and Broader Industry Trends
The outlook for Chola’s key segments remains positive:
• Auto Sector: Expected tailwinds from replacement demand in commercial vehicles and rising incomes supporting passenger vehicle growth.
• Housing: Projected growth of 20-22% in the affordable housing finance sector for FY2026.
• MSME: Continued high demand for secured borrowing and financial inclusion of marginalized sections. Through its disciplined risk management, technological focus, and geographical depth, Chola is well-positioned to navigate evolving industry trends and maintain its trajectory of sustainable growth.