GST Cut Drives October Surge in Vehicle Loans for Cholamandalam Finance
Cholamandalam Investment and Finance Company reported a noticeable rise in two-wheeler and passenger car loans in October, following the GST rate rationalisation in September. President and CFO Arul Selvan said that while exact figures are yet to be shared, the loan uptick is evident and its full impact will be clearer in the Q3 results. He noted that GST benefits largely influence consumer-focused segments like vehicles and durables, rather than productive asset investments. The festive season demand, combined with GST cuts, also supported strong sales reported by major automobile manufacturers.
The NBFC posted a 20% year-on-year increase in net profit, rising from ₹963 crore in Q2 FY25 to ₹1,155 crore in Q2 FY26. Selvan attributed the profit growth to strong performance in mortgage-linked businesses such as loans against property (LAP), housing loans, and secured business & personal loans (SBPL), along with steady MSME advances. Housing loans expanded to ₹20,405 crore, LAP to ₹46,302 crore, and SBPL to ₹7,544 crore, while MSME loans touched ₹2,932 crore in Q2 FY26. The company’s total AUM reached ₹1,99,159 crore for the quarter.
Selvan also highlighted that Cholamandalam is relying on its in-house digital platform rather than fintech marketplaces, currently offering the app only to a select customer base. While NPAs rose to 3.07% from 2.48%, he expects improvement in Q3 and Q4 due to higher festive-season earnings for borrowers. The NBFC anticipates 20–22% growth in AUM and profitability this fiscal year and continues to expand hiring in sales, collections, and digital operations. Selvan added that the company is exploring AI-driven solutions, though full deployment will take time.
