Cholamandalam Investment & Finance Company Ltd – Murugappa’s Lending Machine With a ₹1.28 Lakh Cr Market Cap
1. At a Glance
Cholamandalam, aka Chola, is the Murugappa Group’s lending arm—basically the Chennai uncle who loans you money for your new truck, house, and sometimes even your Samsung phone. At ₹1,522/share (market cap: ₹1.28 lakh Cr), it’s priced like premium South Indian filter coffee—smooth, strong, and not cheap. With AUM of ₹1.65 lakh Cr and debt of ₹1.75 lakh Cr, Chola is literally living the “borrow big, lend bigger” lifestyle.
2. Introduction
Founded in 1978 under Murugappa Group’s empire, Chola has morphed from a sleepy vehicle financier into one of India’s most diversified NBFCs. Back then, the hottest thing on roads were Ambassadors and Bajaj scooters; today, Chola finances everything from CVs to personal loans to affordable housing.
The company has shifted gears rapidly:
Vehicle finance is still the bread and butter (54% of loan book in Q2 FY25), but home loans, LAP, and SME lending are rising stars.
Customer base exploded from 18.7 lakh in FY22 to 42.9 lakh in FY25.
Branches grew to 1,508, mostly in smaller towns, proving NBFC money truly travels where PSU banks fear to tread.
But it’s not all sunshine and coconut water. Cost of funds climbed from 5.8% to 7.1% in just two years, and debt-to-equity at 7.4x is heavier than a Chennai auto meter rigged during peak hours. Still, with ROE around 20%, Chola is the kind of overleveraged friend who somehow keeps paying rent on time.
3. Business Model – WTF Do They Even Do?
Chola’s business model is NBFC 101: raise debt → lend at higher rates → keep spreads fat → pray GNPA doesn’t explode.
Vehicle Finance (54%): Commercial vehicles, tractors, 2W, and used vehicles.
Loan Against Property (20%): Mostly self-occupied homes of SMEs.
Home Loans (10%): Affordable housing for lower/middle-income families.
Other Products (14%): SME loans, personal loans, Samsung phone EMIs, fintech partnerships.
AUM doubled in just three years (₹76,907 Cr in FY22 → ₹1,64,642 Cr in FY25). If Bajaj Finance is the Bollywood superstar, Chola is the solid Tamil hero—less glam, more reliable, still smashing box-office.
4. Financials Overview
Source table
Metric
Latest Qtr (Jun ’25)
YoY Qtr (Jun ’24)
Prev Qtr (Mar ’25)
YoY %
QoQ %
Revenue
₹7,267 Cr
₹5,812 Cr
₹7,046 Cr
+25%
+3%
PAT
₹1,138 Cr
₹947 Cr
₹1,260 Cr
+20%
-10%
EPS (₹)
13.5
11.3
15.0
+19%
-10%
Commentary: Revenue growth looks solid, but PAT dipped QoQ. EPS is behaving like a seesaw—up YoY, down QoQ. Still, maintaining ~20% growth in a high-interest environment is no small feat.
