Good morning, everyone. Welcome to the interaction with management of Cholamandalam Investment and Finance Company Limited.

Today, we discuss 4Q FY '26 earnings and management outlook. The senior management is represented by Mr.

Vellayan Subbiah, Executive Chairman; Mr. Ravindra Kundu, Managing Director and CEO; and Mr.

Arul Selvan, Chief Financial Officer. I would now like to hand over the call to Vellayan for his opening comments, after which we'll take the Q&As.

Thank you, Nischint, for hosting the call. Good morning, everyone.

I'm happy to take you through performance for Chola for Q4 FY '26. First, we'll go through the disbursements growth for the quarter.

Chola reported aggregate disbursements of ₹32,913 crores, which represents a 25% year-on-year growth for Q4, which resulted in AUM increasing to ₹2,42,630 crores. AUM growth remained healthy at 21% as at the end of the quarter, reflecting sustained momentum across the portfolio.

Disbursements registered strong broad-based growth across all major product segments during the quarter. The vehicle finance business reported 26% year-on-year growth in Q4, driven by sustained demand across vehicle categories, with auto AUM increasing 18% year-on-year to ₹1,19,558 crores.

The MSME segment, which comprises of LAP, SME, and SBPL, recorded 11% growth in Q4 disbursements, supported by strong demand and robust branch-led distribution. MSME segment AUM grew 29% year-on-year, with LAP AUM at ₹52,295 crore, which is a 26% growth year-on-year; SME AUM is at ₹9,338 crores, which is a 41% growth; and SBPL AUM is at ₹3,537 crores, which is a 46% growth year-on-year.

The consumer segment delivered 45% year-on-year disbursement growth, driven by sustained momentum across product segments, with the newly launched gold loan business disbursing ₹1,130 crores in Q4 FY '26. Home loan disbursements saw mild moderation in Q4 due to procedural timing factors, including election-related administrative slowdowns, land record digitization mismatches, and localized lien-marking delays in select markets, which temporarily extended verification and disbursement timelines.

Consumer segment AUM grew at 20% year-on-year, including 23% in home loans, while CSEL AUM increased 4%, despite the exit from partnership-led businesses. In terms of profitability, our NIMs improved by 40 bps year-on-year in Q4, driven by gradual reduction in the company's cost of funds as interest rates softened in the period.

Credit costs before management overlay declined by 20 bps year-on-year in Q4 across product segments, reflecting stable portfolio performance. To mitigate any negative impact on credit costs due to heightened global uncertainties, the company has provided a management overlay of ₹200 crores as a precautionary buffer.

The overlay addresses potential second-order stresses arising from volatility in crude and refined fuel prices, risk of LPG supply shortfalls, and supply-side pressures on sectors dependent on global shipping and commodity flows, while core asset quality indicators remain resilient. Return on assets for Q4 FY '26 stood at 4.1% before the overlay, compared to 3.6% in Q4 FY '25, while return on equity for the quarter was 23%, underscoring improved profitability.

We hold a strong liquidity position, with a total liquid asset of ₹21,186 crores, which includes undrawn sanction lines. The ALM is comfortable, with no negative cumulative mismatches across all time buckets.

Our capital adequacy position stood at 19.21% in March '26, with Tier 1 capital at 14.73%. Out of the total issuance of ₹2,000 crore CCDs, CCDs amounting ₹1,370 crores were converted in FY '26.

The balance ₹630 crores of CCDs is expected to be converted in the first half of FY '27. The Board of Directors of the company has recommended a final dividend of ₹0.70 per share, which is 35% on the equity shares of the company, subject to the approval of the members of the company at the ensuing Annual General Meeting.

This is in addition to the interim dividend of ₹1.30 per share—₹1.30 per share at 65% for the financial year FY 2025-26 declared by the company on 31st January 2026. Nischint, with that, I'll stop, and we'll be happy to take questions from all of you.

Sure. We will now start with the question-and-answer session.

The first question comes from Kunal Shah of Citi. Kunal, you can unmute and ask your question.

Yeah. Hi.

Thanks for taking the question. Looking at this outlook, no doubt we have created this overlay buffer, but if you can guide in terms of how we are looking at the trajectory getting into FY '27, and both with respect to AUM growth as well as credit cost, if you can indicate in terms of how the outlook will be.

Anything particularly on the vehicle finance side or any of the segments wherein we would have tightened the credit filters or improved the screening out there? How we are incrementally looking at this segment, yeah?

The credit filter side, I would like to mention that we have been continuously working to improve the Gini coefficient of the underwriting tool, working for all the eight divisions. That will help us to improve further improvement in credit cost.

In this financial year, we are still holding our growth trajectory between 22%, 23% what we have been committing. We are still hoping that our net credit cost will go down from 1.6% pre-overlay to 1.5%, and our ROTA should improve then closer to 3.5% pre-tax ROA, which we have been discussing that.

Okay. Got it.

You mentioned in terms of the credit filters, I didn't get that exactly.

We have been working on the improvement of underwriting tool, which is a Gini coefficient,

and

that is to decide the accuracy of the decision taken by us. We are working along with all the trade managers of the company for each division to improve that.

That has been there for last 1 year, and that has actually helped us to improve quality of the CSEL, CD, and vehicle finance during the quarter 4, and which is going to be continued even in this financial year.

Okay. That should help the overall credit cost trajectory of 1.5-odd percent?

Yeah. It should help us to get that number.

Okay. No need for any further overlay?

This doesn't include any overlay buffer as such? We believe ₹200-odd crores which we have done, that is sufficient enough taking into consideration the current dynamics which are there?

Yeah. It is, strictly speaking, is a more of precaution considering will there be any heightened credit cost of this, it will be uncertainty.

As we talk now, there is no for any further.

Perfect. Yeah.

Thank you.

Raghav Garg of Ambit, you go next.

Okay. Am I audible?

Yes, yes. Go ahead.

Yeah.

I just want to understand, see, for April '26, these two key OEMs, Tata and Eicher, have reported fairly a good growth in their CV volumes. Now should that be taken as a proxy for how the on-ground sentiment is amongst the CV operators, that despite the war and despite the disruptions that have been there domestically, they are still going out there and buying trucks because they see the good demand for transportation?

Or do you see some risk to CV sales momentum sustaining in the near term or even in the medium term, and that could be a risk to your growth guidance or estimate? That's my first question.

Yeah. See, not only commercial vehicle segment, is passenger vehicle also has shown the good number in the month of March April.

We have got the opportunity to see our number also. Our number with respect to sales, credit, collection, as compared to the April 2025 has been pretty good.

As of now, we have not seen any change in behavior.

Understood. What you're essentially saying is that despite all those disruptions and the narrative being that there is a lot of risk, and I think rightfully so, you've also taken some management overlay, there is nothing on the ground, at least in terms of data, that would suggest that things are deteriorating.

Is that understanding correct?

Absolutely. Absolutely.

That is correct.

Okay. My second question is that for FY '26, can you give me the total recoveries cost?

This same number in FY '25 was ₹441 crores. What was this number for the full year FY '26?

Then I have a follow-up question on this.

Maybe we will come back after seeing the numbers, and then you also ask the question once we are ready with...

What I wanted to ask is that, typically, what we've seen is that in years when there is asset quality pain, the recoveries cost grow at a higher rate versus, say, the overall business growth or your opex growth. I am assuming that it would have been the case this year also, but with the asset quality improving, in FY '27, your recovery cost growth should be much lower or it may not increase at all.

Could that be one of the levers to your opex ratio improvement next year? I just want to get your thoughts on this.

Yeah. I think you are asking about the collection cost in terms of percentage to the asset.

If you see that the collection cost is a part of the total operating expenses. Total operating expenses has been nearly at the same level.

It is 3.1%, compared to last year of 3%. Nothing has gone up in the operating expenses, in spite of we have opened up gold loan business and also we expanded in consumer durable.

That shows that the recovery cost has not gone up. Recovery has improved because in the quarter 3, quarter 4, we have seen that capacity utilization has improved.

Also, we got the opportunity to get resolution through SARFAESI in the mortgage side. Both put together, the collection efficiency has improved.

Another important thing, you have been kindly saying that our Stage 2 has been improving throughout the year, quarter 3 quarter 2 onwards. That shows that, in general, the customer's repayment capability during the year for the customers who are in 0 to those who are in 31 to 60 and 61 to 90 were actually good.

That's the reason Stage 2 has come down, and finally, Stage 3 has also improved in last quarter.

Understood. Thank you.

Do I have opportunity for one more question

or? Yes, go ahead.

Okay. See, when I look at your total gold loan AUM, and then when I divide that by the total active customer base in the gold loan segment, that comes out to be some ₹5, ₹6 lakh of exposure per customer.

I just wanted to get some sense on what kind of ticket sizes you are doing in gold loan segment and what kind of yields are you charging to customers. I just want to get a comprehensive color on the kind of customer segment that you're targeting and how are you positioning yourself versus the other gold loan NBFCs?

Yeah. If you look at it, our average ticket size for a loan in Q4 has actually come down from when we started, it was around ₹3 lakhs.

Now it has come down to ₹2 lakhs. We're getting more granular in terms of our acquisition strategy.

Yes, I think in gold loan, typically, what happens is that a customer takes more than one loan, right? Typically, when you look at a total customer exposure, it could anywhere vary between ₹5 to ₹6 lakhs per customer.

In terms of the average ticket size at ₹2 lakhs.

Now coming to the next... You're saying that even your customer would have around 1.5 to 2 loans,

but

the total exposure would be ₹4 to ₹5 lakhs?

Yeah.

Okay.

Yeah. As I and I think, as I'd mentioned, we've always been maintaining.

Our yield also, has been, very very healthy as compared to our peers.

The ticket size is ₹2 lakh now. It is started with ₹3 lakh is come down, and yield has gone up to now 15% yield also.

The yield is also it's pretty healthy as compared to our competitors. If you look at, our strategy is to get as much granular as possible, get into more of the retail customers, and we have been successful in doing that over the last 9 months of operations.

Understood. Thanks a lot for all the answers.

Thank you.

Yeah.

Viral from IIFL, you go next. Yeah.

Hi. Thanks for the opportunity, and congrats on a good set of numbers.

I had two questions. Sir, one is on the CSEL piece.

When I see our segmental numbers, I think we are now starting to see a genuine turnaround, I would say, on the asset quality as well as I think we are getting our growth over here. Can you just highlight what is now incrementally you are looking at this segment in terms of, say, the growth potential, number one?

Number two is, I see that the expense or the opex levels also have gone up in this quarter. Where are we investing in terms of distribution, which product segments?

What can be a steady state, say, and ROA outlook for, say, FY '27 and '28 in this segment and whether it will be to what degree and extent ROA accretive? That's my first question, sir.

CSEL now has got two businesses. One is unsecured personal loan, business loan, and professional loan, one side.

Other side is a CD, mobile lending, and also direct-to-customer, which is online in-house FinTech. These are the two businesses we are doing it.

You have seen that our loan losses has come down to 5.2% in the quarter 4, and that is going to continue to further improvement. That's the reason if you take 2.3% ROA of the quarter 4, it should definitely cross 3% ROA, pre-tax ROA, in the financial year, which is going to be due to further improvement in the loan losses and also the NIM also should improve because of the consumer durable also growing.

That is the one thing. In terms of growth, the disbursement growth has been 39% in quarter 4, which is going to be continued because quarter 1, quarter 2, we had low base benefit.

The important is the asset growth, which is now just started to grow. It is now at a 4% level.

We are expecting that by the end of this financial year, the CSEL, both put together, unsecured, PL, BL, and professional, and CD and digital and mobile, put together, should be at least in the quarter 4, we are expecting that start hitting 20% asset growth. Operating expenses is basically high in the quarter 4 because CGTMSE insurance we have paid, and now in this financial year also, we are going to pay, which is going to get distributed over the across all the quarter.

This impact of 6% will not be there. It will go down to the level it was 4.5%.

That's how we are expecting that there's going to be improvement from operating expenses as well as the net credit cost, which will help to increase the ROA from 1.6% of this financial year to 3% or more.

Got it, sir. Very clear.

Just as a, I would say, extension to your response, you mentioned that you have paid premiums for CGTMSE in this pool. What percentage of the BL over here will be covered by this insurance?

As of now, we have covered around 70% of our assets, and now we will continue to improve that. Probably, we may go up to 80%, 82%.

That is what our plan is to cover the asset in unsecured business.

Okay. This will be around ₹10,000, ₹12,000 crore asset, right, in the ex of CD business?

No, it is only BL portfolio that we are going under CGTMSE, and it will be around ₹3,000 to ₹3,500 crores of this.

Yeah. As I mentioned that actually include PL, BL, professional in one side, and other sides, CD, mobile, and D2C.

The BL part is actually ₹5,000 crore, isn't it? Of that, 80% is around ₹3,500, yeah.

Got it, sir. Very clear.

Sir, the second question is with regards to on the asset quality front in April. You did highlight that you are not seeing anything, say, from a customer or the borrower behavior.

If you can just throw some light in terms of how are your bounce rates trending? Is this basically across the segments, vehicle finance and also the home loan, LAP?

If you can just give some color over there, qualitative as well is okay.

See, the most biggest benefit has to come from vehicle finance, isn't it? I think Balraj is the right person to talk about it, what he has seen actually in the month of April.

See, we've just closed April. Two, three things.

The early defaults, non-starters, compared to '24 April, '25 April, we are much lower in the month of April '26. Even this is almost at par with April March '24 and '25 numbers, and we have not seen much of a deterioration.

Normally, April March to April, there is some some level of deterioration. This month this here it has been at

par.

Second thing, even in the first cut NCL numbers are lower than last April. That's where we are.

Got it. This is super clear, sir.

Thank you so much, and all the very best.

Thank you, Viral.

The next question comes from Abhijit from Motilal Oswal.

Yeah. Thanks, Nischint.

Hi, sir. Good morning.

Sir, just on the ROA tree, last 2 years, I think you'll also acknowledge has been particularly tough, especially from the vehicle finance side. Balraj sir just mentioned that in April 2026, non-starters have been much lower than what we saw in Aprils of last 2 years.

Just trying to understand versus ROAs of 2.3%, 2.4% that we've seen in the last 2 years, you'll remember when we had started these newer business lines, the whole idea was to get to better ROAs over a period of time. I acknowledge last 2 years on the NCL line has been higher.

Now, when you said that this year, FY '27, we should look at a credit cost of 1.5%, just trying to understand which segments, vehicle being one, CSEL, you'll remember last year we were incurring higher credit cost on that book which was originated through FinTech partnerships. Just trying to understand, what all levers will we have on the ROA tree which can lead to an ROA expansion this year, next year?

Abhijit, this is Arul. What will happen

is

NIMs will hold at similar levels at around 8%. What will happen is the newer businesses will give better yield, but that may get offset on a conservative basis by a slightly higher cost of funds that may happen over the full year of FY '27.

I am looking at 8% NIMs to hold because of these two combinations. Opex will be in the range of around 3% to 3.1%, so that would more or less again remain same.

The saving will come from NCL, which will come from vehicle finance as well as CSEL, as you rightly said. These two coming through will get you the 20 basis points comparison.

See, today, we are at 3.3% after considering management overlay of around 9 bps. That if you remove, our current NCL is 1.6%.

Even if we do 1.5%, we should reach easily the 3.5% pre-tax ROTA from that, yeah.

Got it, Arul sir. Sir, while you're here, just wanted to understand, what will be the approach to ARCs in the coming years?

Basically trying to understand this SBPL book that we have, that is not something where we can apply SARFAESI. What will be the approach to ARCs in that business?

Our focus would be to use ARCs wherever we are not able to leverage SARFAESI, which is any loans which are of a less than ₹20 lakhs number, whether it is from home or SBPL or these are the two broad businesses. SME and LAP ticket sizes are larger, they will certainly use SARFAESI, they may not go for the ARCs in that context.

Got it. Thank you, Arul sir.

Last question is for Ravi sir. Sir, just trying to understand within the vehicle financing book, various subsegments, you mentioned earlier April trends are looking good, but are there any product subsegments or geographies where you are seeing anything unusual or everything is as per expectations and till now you've not seen any impact of the war?

For last 3 years, we have been going through the problem either from the geography point of view or the product point of view. That is why we were saying always that it is a down cycle of vehicle, and that is what impacted the vehicle sales, whether it is a small ticket-size loan like Tata Ace type of vehicle, which is a small commercial vehicle, or light commercial vehicle, even heavy commercial vehicle.

All segments got impacted. From Q4 onwards, it is started improving.

Now even in the month of April, we see that the demand for the vehicles are still holding. As Balraj mentioned that all the delinquency with respect to early default, non-starters, across all product segments, things are looking better.

We have been saying that we will gain a little bit market share also in the vehicle finance because things are looking better is last year we said that. It is continued.

I'll say that last year when we started, we were having three engine of Chola: LAP, SBPL, and HL. They were driving the growth.

Now all eight engines are driving. That is what is our comfort level, and we are diversified within vehicle finance, we are diversified within Chola, we are diversified in the geography point of view, and that will take care of the uncertainty which is there in the market.

Got it. This is very useful, sir.

Thank you very much, and I wish you and team Chola the very best.

Thank you.

Thanks. Next question comes from Deep of Bandhan.

Hello, sir. Thank you for the opportunity.

Am I audible?

Yes, yes. Go ahead.

Sir, one quick thing. We are at around 6.94 times gearing and guiding of growth of around 20% to 23%.

Any sense, sir, or clarity on when will we raise some capital if needed? Not on the quantum, but any timelines for those?

Because I think 19.2% is our capital adequacy ratio, will we consume some amount of capital for growth this year as well or our internal accruals will be sufficient? Any clarity, sir, on this part?

Sir, one follow-up on this is that any internal policy or something that we have in mind? I understand that we have been reducing gearing from 7.17% 7.17 times last quarter to 6.94 currently.

Sir, any internal policy or any guidance that you would like to give for the gearing ratio? See,

we more typically follow the capital adequacy ratio, and we have given guidance there that if the Tier 1 ratio comes to 13%, we will certainly start looking for equity. In a situation where we are returning a 3.5% pre-tax ROTA and growing 11 20% to 3 22 25%, we should be able to be self-sufficient in providing capital.

This has been our stated way of looking at capital requirements. Having said that, if there is good growth opportunities, we will certainly look at bringing in additional capital to strengthen the growth.

This will be done in consultation with promoters and other senior people in the organization as we move forward, evaluating the market situation as well as the growth potential. The stated policies, I've already given you.

Okay. Sir, and one one more question.

I understand we are at AA+ Positive from ICRA and AA+ Stable from all other rating agencies. Sir, any initial talks, what they have been saying to take Chola to a different level from AA+?

Any steps that we are following there or, in such scenarios, anything that you would like to highlight on that part? No,

we are in discussions with them, and they really keep evaluating. As it is not like a given formula that you reach a certain numbers, then they will automatically give you.

It's both a qualitative as well as a quantitative approach to the rating approach. Many of the other competition will be getting the AAA, getting parentage support, et cetera.

Volatility we cannot do that because there is not any dependence of any of the parent organizations on Chola for their funding requirements, et cetera. That being the case, we continue to be AA+ from that time.

Sure, sir. I understand.

The positive trigger is also a qualitative one. Thank you for the input, sir.

All the best for the next year.

Thank you.

Next is Abhishek from HSBC.

Yeah. Hi.

Good morning. Just a few questions.

First, on vehicle loans this year, what is the disbursement and AUM growth that you're looking at?

Vehicle finance, we are expecting to continue the closure where we are as of now in quarter 4. That is coming to around 15% to 20% disbursement growth and around 18% asset growth.

Okay. Considering that there might be some disruptions, even then you're confident that you can do this level of growth in vehicles this year?

Yes, that is what Balraj is committing.

Got it. Right.

The other question is the FinTech book, how much of it is left to run down now?

₹300 to ₹400 crores, but this will be little long tail because it will run through the entire year

because these are the leftover

beyond 1 year type of.

Okay. It's quite negligible that way.

Okay. The third thing is in overlay provisions that you have made, have you changed any PD, LGD assumptions, and does the run-rate credit cost change, or this is just a one-time activity and you go back to the run-rate credit cost going forward?

No, PD, LGD, we have not changed. If we change PD, LGD, then that is not overlay.

That

wouldn't be.

Yeah. The overlay has been arrived at based on a past experience of similar situation when the diesel prices went up and how the delinquencies had sort of panned out at that time.

Similar approach we have taken to look at what should be the overlay and arrived at this overlay. There is no change in the PD, LGDs.

Got it. Because some other NBFCs are having to change some of these core assumptions.

Nothing like that, right? The ECL model remains as is.

Because Abhishek, the PD, LGD is based on past experience and past data.

Yeah.

Can't change the data for the past period. The past period gives me PD, LGD.

There are two options to do it: one,

I

add it to the macro, or I add it as a overlay. The macro information available is, again, citing a much better GDP growth and much better forecast because this was done pre the IMF macro data that we rely on has come pre-February before the war.

That is why we said we will consider events that happened post-February to factor in this overlay.

Got it. CGTMSE, the cost for this quarter would be roughly around ₹40 crores?

Yes, around ₹35, ₹40.

₹38 crores. ₹38 crores.

Perfect. Just one last quick question on HL yields.

How that inter-quarter movement is because of assignment and upfronting of income, or is there something else? No, no.

Assignment income is not given credit into that respective business portfolios, that's separately shown. We have not assigned any HL book also incidentally, it's more some other portfolios.

Yeah.

Arul, this 50 bps jump

in HL yields? Primarily coming from the ARC accounting where ARC amount is shown as income, and then the NCL is right.

This two nets off overall ROTA remains same. It's given as a footnote at the bottom always.

Page number 17 footnote is there. 0.39% is the yield gone up because of that.

Okay. Got it.

All right. Thank you.

Those were my questions. All the best.

Congratulations for the quarter.

Thank you.

Piran from CLSA, you go next.

Yeah. Thanks.

Congratulations, team, on the very strong set of numbers. Just firstly, what would it take for home loan disbursements to pick up?

It's been in this ₹1,800, ₹2,000 crore range for now seven, eight quarters.

The point here is as of now, we maintain a steady growth rate of 23% on the book. We see now this Q1 should be slightly better, and last year Q3, Q4, we have seen the increased numbers.

We crossed ₹2,000 crores also in Q3. We expect this year we should be clocking in 12% to 15% disbursement growth, and we made a steady growth on AUM side around 25% plus.

Sir, why has it been lagging? What will change next year for growth to pick up to 15% if I ask it that way?

Yeah. This is basically when we started disbursement 4 years back, our penetration was only in south.

All the scale up since the last 3 years have come to pan-India presence. The branches we have added has started kicking in value.

The proportion of south is continuously coming down, and the other areas of India we are managing it good. We see the incremental business coming from other locations in terms of productivity hike, and also the branches are getting mature.

Next year is the year where our disbursement will scale up, the efficiency will go up, and we'll maintain the ROTA of 4.2% plus.

See, one thing which we mentioned in the note itself in the beginning, Chairman said, that there has been some delay in the completing the documentation due diligence because there are two states in the south elections are going on. That has actually reduced the both disbursement of LAP and HL.

That is not impacting the overall asset growth. We are quite confident that we will be clocking 25% plus asset growth in the HL and LAP.

As well as there are two more mortgage businesses we are having, SBPL and SME. There, the growth will be higher than 30%.

Put together, the mortgage business growth are going to drive the overall growth of the company, and new businesses like CSEL, CD, gold are also supporting that. That's the reason we are saying that we are quite comfortable in holding our commitment of growth of 20% to 23% for a company level.

Understood. Sir, secondly, on vehicle finance, just wanted to understand, let's say fuel prices go up 10% tomorrow.

How much do you need to increase freight rates to offset that and maintain steady profitability per truck? See,

there are two type of customer segment. One is the, and especially for the heavy commercial vehicle segment alone, one is that the commercial vehicle segment in our business is only 5% to 7%, which is very small percentage.

Rest of the businesses are small commercial vehicle, light commercial vehicle, passenger car, construction equipment, where the fuel doesn't impact much. It impact only the heavy, and within the heavy, it impact only the long-haul transporter who are burning more diesel because they run, say, 300 kilometer on an average in 20 days.

They they will run for 6,000 kilometer, and fuel efficiency, 3 kilometer per liter, then they will have to buy 2,000 liter. If the diesel prices goes up by ₹20, which is 20%, or maybe slightly higher than that, 25%, then they will have to spend ₹50,000 extra.

Now total income after paying all kind of thing in the long-haul transportation is ₹1 lakh. That ₹1 lakh, even after 25% goes up, they will actually have a saving of ₹50,000.

That will impact their standard of living definitely, but then it doesn't impact the EMI payment and other repayment. That's one.

That is applicable for long-haul transporter. Long-haul transporters are fleet operator.

We are into the small route transport operator who are operating within the city or within the state. Therefore, passing on the the freight with actually, increase diesel prices is easy for him.

Those who are working under contract, large fleet operator with the contractor or no-load provider, for them, it is not easy immediately. What we see that actually because of the heavy commercial vehicle portions are very small for us and also more or less SRTio, diesel prices increase will not have very highly impact.

Our problem is demand. If the demand is there, the load is available, then it will be a easy for everyone to pass on this price.

Sir, but one fundamental question. Why will fuel price not impact LCV operators?

Is fuel cost a smaller proportion of their revenue than for heavy?

No, they are not running 6,000 kilometer. Their run is small.

A small lead they run, and also small market load operator. They take load from the open market, and they pass on easily.

It's

daily pricing. It's like a daily pricing.

It is a daily pricing. It is not a fixed pricing which you have to work for a particular period.

That's

Yeah. No, in heavies, the buyer of kind of logistics has much more clout.

Basically.

He's

dealing with a business

customer. Fair.

Secondly, and this is probably very qualitative, but which of the end segments are more price sensitive or price elastic as in, for example, if freight rates go up 20% tomorrow, where will we see a drop in demand because of the freight rate rise? For example, if I'm shipping iPhones and the freight rates go up 20%, there's obviously not going to be a drop in demand because the freight cost is a minuscule proportion of the iPhone cost.

There'll be many other sectors where this would lead to some sort of elasticity of demand. If you could just maybe touch upon this qualitatively, that'll be useful.

See, actually, what you're saying, the freight goes up. Freight goes up only when the demand is there.

If demand is there, freight cannot go up, isn't it? That is what is the basic thing.

If there is a demand, if the loads are available, then only transporter can ask for more freight. That is the point one.

Point number two is that the transportation cost doesn't impact the demand. It is actually more their inflation.

If they have a

I think Piran's question is on end segments, right?

Exactly.

I think, Piran, see, your analyst colleagues in other sectors will be able to give you the best answer because, basically, the data point you need, Piran, is what is logistics cost as a percentage of the overall revenue associated with a product, right?

Correct. Exactly.

Now we know that in some heavy infrastructure sectors, logistics cost can be as high as 22% or even 24% of total cost structure. Obviously, those, right?

I think your analyst colleagues will easily be able to give you that breakdown. That analysis is fairly simply available as to what is logistics cost as a percentage of overall cost of the sector.

I think broadly, we know, right, that the heavier infrastructure sectors have a higher logistics cost as a percentage of cost or revenue.

Understood. Okay.

I'll take it offline for further details. Thanks, and congrats on the quarter once again.

Thank you.

Thank you. We have a large participant list for questions, my suggestion is just to keep it brief and maybe one or two questions.

Shubhranshu from PhillipCapital, you go next.

Hi. Thanks, Nishant.

Good morning to Mr. Subbiah, Arul sir.

Two quick questions. The first one is the growth number that we gave, that's on the disbursement.

If you can split this number into a business-wise, I think you have already given for vehicle finance, for rest of the businesses if you can split this growth for '27, what kind of growth we can look at for each of the businesses? Second is, how many people do we deploy in collections, and if again we can split that business-wise?

Thanks.

Shubhranshu, I can't give you business-wise this data. We have given a lot of data,

and I think At least the total number of people in collections, sir?

Total number of people we can give you. That is around 30,000 people we have on the collections.

That is there. Independently each business-wise, very difficult to share because that's not probably available.

That's fair, sir. That's fair.

I'll take it offline. Thanks.

The first part of the question, sir, the growth numbers?

Growth numbers also we have given you AUM growth only. AUM growth we have said it will be between 20% to 23% as we have talked about earlier.

Independently, I think vehicle finance, we have said 18% growth. Then the LAP and HL will be growing in the about 25% to 30% even.

The rest of the business, which are new, because the base is low, will actually clock a larger percentage, but they would average out to the 20% to 23% I spoke about.

Right, sir. If I can just squeeze in one last question, sir.

If I look at the LAP PBT as a percentage of total PBT, sir, it's roughly around 30%, 31%, which is quite high versus rest of the previous 5, 6 years, sir. Earlier, it used to clock anywhere between 19% to 22%, and this is a huge spike.

Any reason it is here or we are likely to see this come off? If you can elaborate on that, it would be great, sir.

Thanks.

No, they have been growing their book quite decent growth, and their costs on the credit also low. That's good, and we are quite happy about that, and we'd like to continue that.

It'll stay at around 30%?

Yeah.

Right, right. Understood, sir.

Thank you so much. It was great.

Best of luck for the next quarter and next year, sir.

Thank you.

Thanks. Nidesh from Investec, you go next.

Thanks, Nischint. Sir, my question is on branch addition.

What are the plans to add branches in vehicle, home equity, and home loans in FY '27?

The point here is we already have the vehicle finance branches. The only for us is extension of putting manpower.

We are planning around 60 new branches in Q1 and Q2 40. So 100 branches in home loan will be next financial year.

These will be shared branches of vehicle finance. Unique branches would be the gold loan branches,

which should be in the range of around 300-plus. Yeah.

Would always be part of the VF. Yeah.

All the other businesses would mostly be in the vehicle finance branches. Vehicle finance branch by itself would go up by around 100.

It's typically

for the other divisions, it's deployment of manpower in the branches, which will create the new counters,

yeah.

100 in LAP.

100 in VF, and then probably 300 in gold. That will be the branch addition.

100

in 100 in VF where other would also start participating. Each of them would start participating in existing VF branches and their growth like what Prashant said and Suresh.

They will start operating out of existing VF branches where they are currently not operating.

The count would be 100 in HL and 100 in LAP.

100 in HL and LAP, yeah. Don't add up all the numbers

to arrive at the total

number of branches for Chola, that's what I was trying to tell you.

Sure. Thank you, sir.

That's it from my side.

Thank you.

Sorry, just a clarification. Gold branches addition is 300, and what is the current base?

We're adding 360 more. Today, they are at 120 120 to 480.

HL will increase 100, LAP will increase 100, vehicle will increase 141. Similarly, CSEL

and CD are also likely to increase 100 branches more every SME

is going to go up by 20.

Gold tends to be exclusive, right? There is no sharing of branches for gold?

Gold alone would be exclusive. Rest of them will all cohabitate.

Perfect. The next question comes from Shreepal of Equirus.

Shreepal, you can unmute and ask your question.

Congrats for a good quarter. My question was on vehicle finance.

Within that, HCV has seen a very strong growth this quarter. Are we seeing similar trends in April as well?

How is the competition from banks in this particular segment, especially on the newer side?

Sir, as of now, in the month of April, we have grown across all the segments. We have grown in passenger vehicle, we have grown in two-wheeler, we have grown in heavy commercial vehicle and LCV.

Across the product, we have seen, and we have been able to increase our market share.

Okay. On the competition from bank, if you could give some color there?

As of now, since we have grown,

we have not seen actually Similar level at where it was.

Okay. Got it.

See, is that the trend in the newer segment as well? Because PSU banks were hurt, they've become very aggressive in that particular segment.

We are not seeing any

Yes, they are into passenger.

We are not seeing any significant shift in the competition behavior in the last 4 to 5 months, and in April also, there has not been any change.

Got it. Thank you.

Thank you for answering my question, and good luck for the next quarter. Sir,

apparently, as per CMIE data, freight rates have already gone up in April versus March. Apparently, some of the data suggests 10%, 12% month-on-month growth.

Is this something which is to do with demand or is it something in anticipation of fuel prices?

Demand only. As of now, diesel prices are same level.

Demand has been strong in April.

Yeah. Demand has been strong in April.

The prices have not gone, fuel prices cannot be the reason for increasing the freight.

Got it. Yeah.

This was the last question. We don't have any further participants in the queue.

Anybody who wants to ask a question can raise their hand. I think, yeah, that's it.

We are done. Thank you very much,

participants.

Thanks, management, for giving us an opportunity to host the call. We have a question from Harshit.

Can we take that if

the Okay.

Yeah. Yeah.

Harshit, you can ask your question, yeah.

Sir, the question was on the cost growth itself. When we look at FY '26, our employee cost was around 27% Y-o-Y.

Going forward, obviously, we want to invest in gold loan and we want to invest in newer businesses, but how should we look at the overall cost growth versus the AUM growth? I think, on net basis, should it now start tracking AUM growth, or we should start getting some operating leverage out there?

See, I think it will take another year or so to get any operating leverage because we are adding new branches for most of the businesses, as we just spoke about it. We will still continue to hold it at a 3% overall to the average assets.

That's what we have. Sometimes, we can't like 3.1% as opex to average assets.

Right now, I wouldn't want to factor that we have

Got it. Because given in gold loan, the assumption was that typically the break-even periods are shorter compared to non-gold loan businesses.

There's large amount of capital deployment because these are exclusive branches, and people have to be recruited unlike vehicle finance, it will not be people who are new or raw candidates. We need to bring in experienced people from other gold loan setups, et cetera.

Because of that, higher cost. There are other initiatives on the IT side, which is on the AI side, which is also bringing in larger costs.

I think

that will not come too many now ahead of what we are

Understood, sir. Perfect.

We'll take the last question from Bunty Chawla.

Yeah.

Thank you for the opportunity. Am I audible?

Yes.

Thank you. As we have seen new business part or CSEL, which were struggling with respect to asset quality and all, are doing good now.

We are confident on that. Vehicle financing was some bit of a pain in terms of asset quality, that is now out.

Growth, we are very much confident in vehicle financing. In terms of West Asia crisis, if you're saying, already, we have a overlay of ₹200 ₹200 crores on the credit cost per se.

Then too, we are still guiding for credit cost as a whole from 1.6% to 1.4%. If we go with the history, we have been in the range of 1% to 1.4%.

What still getting us to still give a credit cost guidance of just 1.5%? We can easily touch 1.4% with respect to history.

What is that creating us back, or are we being conservative in that sense? If you can share some bit of a thought process on that.

See, 1.5% is the idea for this year. From 1.5%, if we get it, then even next year, we have to reduce it to 1.4%.

Every year, we have to improve upon. We don't want to take more target from you all.

We have to achieve every year. Let us see that how much we can do this year.

Based on that, we will try our level best to do across the future. ECL has started just improving.

Another thing is that we need to understand the high-yield business, which is CSEL, CD, then digital as well as mobile, all are having little higher net credit cost by design. If they are growing, then that higher credit cost also will be there.

At the same time, mortgage businesses are having a lower credit cost. Then we have vehicle finance, which is in average.

All three segments, we need to look into it and then arrive at a actual credit cost, which is going to be standard for us. Like in the past, it used to be 1% to 1.2%.

We need to define that. That can be defined within next 1 1 1 and a half years or 2 years down the line once all eight businesses are set.

As I've mentioned, all eight businesses are started doing well. If we work for another 2 years, we will come to the conclusion that what would be our future ROA and what would be our future NCL.

As of now, let us actually hold it at 1.5% for this financial year. We will try to do better.

That was very helpful. Thank you, and best of luck for next year.

Thank you.

Perfect. That was the last question.

Thank you very much for joining us. Thank you, management, for giving us an opportunity to host the call.

Thank you.