Cholamandalam Financial Holdings (CHOLAHLDNG) Q4 10/11 earnings summary

Executive summary

• FY11 gross sales and processing charges reached ₹3,129.99 crore, up 28% YoY; operating profit before depreciation and interest was ₹350.22 crore, up 32%.

• Standalone PAT rose to ₹169.66 crore from ₹81.21 crore; PBT growth also reflected ₹20.60 crore of land-sale income and a prior-year ₹39.95 crore subsidiary-liquidation provision.

• Consolidated net profit was ₹195.90 crore versus ₹112.26 crore; comparisons were affected by CIFCL becoming a subsidiary in April 2010.

Financial highlights

• Net sales and processing charges were ₹2,966.17 crore versus ₹2,345.64 crore; operating profit before tax and exceptional items was ₹220.70 crore versus ₹169.45 crore.

• Standalone EPS was ₹9.16 basic and ₹9.11 diluted, versus ₹4.39 and ₹4.38; proposed final dividend ₹1.50/share followed an interim dividend of ₹1.50/share.

• Cash generated from operations rose 57% to ₹322.65 crore; net cash from operating activities was ₹256.96 crore versus ₹151.55 crore.

Outlook and guidance

• Planned largest-ever capacity and capability investments, with substantial engineering capacity investment expected in FY12; R&D and application-engineering emphasis to increase.

• Cycle plans include greenfield facilities for eastern and southern markets, plus design, manufacturing technology, brands and retail investment.

• New tube and chain facilities, expanded fine-blanking capacity, and more value-added products are intended to address demand and broaden market reach.

• Electric-scooter demand may recover with government incentives and rising fuel prices, though wider customer acceptance could take time.