Cholamandalam Financial Holdings (CHOLAHLDNG) Q4 17/18 earnings summary

Executive summary

• Demerger of the manufacturing business took effect on August 1, 2017; the remaining business is a core investment company focused on lending, general insurance and risk services.

• FY18 was the first full year of financial-services operations; consolidated net profit rose to ₹599.02 Cr from ₹454.57 Cr, with total revenue from operations of ₹3,344.77 Cr.

Financial highlights

• Standalone FY18 revenue from operations was ₹64.62 Cr, PBT ₹61.41 Cr and PAT ₹59.36 Cr, versus ₹40.07 Cr, ₹36.29 Cr and ₹36.29 Cr, respectively, in FY17.

• Consolidated FY18 total income was ₹3,345.82 Cr, PBT ₹352.00 Cr and PAT before minority interest and associate profit ₹245.36 Cr; net profit attributable to shareholders was ₹599.02 Cr.

• Consolidated basic and diluted EPS were ₹31.95 and ₹31.92 in FY18, versus ₹24.26 and ₹24.24 in FY17.

Outlook and guidance

• Indian GDP growth was forecast at 7.4% for FY19 and 7.8% for FY20; financial-services prospects were supported by digitization, financial literacy and government initiatives.

• CIFCL outlook was positive, with vehicle finance supported by tier 2/3 penetration, income growth and lower cost of capital; housing growth expected to benefit from affordable-home supply and policy support.

• General insurance outlook was described as positive, supported by agriculture and auto recovery, rural health-insurance awareness and the National Health Protection Scheme; risk-services growth aimed to expand consultancy offerings.