Cholamandalam Investment and Finance Co Ltd (CIFCL) on Wednesday reported a 85 per cent decline in net profit to Rs 43 crore in the fourth quarter ended March, due to higher provision of Rs 504 crore related to the COVID-19 pandemic and the possible macroeconomic threats. The diversified financial services company had reported a net profit of Rs 292 crore in the corresponding period last year.
“We had made a one-time provision of Rs 504 crore, which impacted our profitability. Had this provision not there, our PAT (profit after tax) would have been around Rs 370 crore during the period,” its Executive Vice-President and CFO Arulselvan D said.
He added that the provisions will cover probable credit losses that can happen due to moratorium as well as slowdown in economic activities.
Nearly 75 per cent of the company’s loan book is under the moratorium. It has extended the moratorium to 76 per cent of its customers.
The company, however, has not availed moratorium so far on its borrowings, and it does not intend to avail any moratorium benefit. “Currently, our liquidity position is reasonably strong. We have Rs 6,500 crore of cash balance and Rs 3,500 crore of sanctioned lines,” Arulselvan said.
For the full year, the PAT stood at Rs 1,052 crore, down 11 per cent as compared to Rs 1,186 crore in 2018-19.
Its stage-3 assets stood at 3.8 per cent with adequate provision coverage ratio of 41.5 per cent as against 2.7 per cent in 2018-19 with provision coverage ratio of 38 per cent.
Aggregate disbursements for the quarter declined 36 per cent to Rs 5,663 crore as against Rs 8,893 crore in the previous year.
The vehicle finance (VF) business has clocked a 36 per cent dip in volume to 4,703 crore for the quarter as against Rs 7,383 crore last year.
Home equity (HE) or loan against property business disbursed Rs 589 crore as against Rs 1,034 crore a year ago.
Home loan disbursements were down 31 per cent to Rs 271 crore as against Rs 392 for the same quarter of 2018-19.
Assets under management grew 16 per cent to Rs 66,943 crore as compared to Rs 57,560 crore in 2018-19.
The capital adequacy ratio (CAR) as on March 31, 2020, stood at 20.68 per cent as against the regulatory requirement of 15 per cent.
During the quarter, the company raised Rs 900 crore through a qualified institutional placement process.