Your Directors have pleasure in presenting the forty-eighth annual
report, together with the audited financial statements of the Company for the year ended
31 March, 2026.
FINANCIAL RESULTS
| Particulars |
2025-26 |
2024-25 |
| Gross Income |
31,444.84 |
26,054.76 |
| Profit Before Tax (PBT) |
6,960.66 |
5,736.87 |
| Profit After Tax (PAT) |
5,219.59 |
4,258.53 |
| Total Comprehensive income |
5,392.06 |
4,117.07 |
| Appropriation: |
|
|
| Transfer to statutory and other reserves |
1,050.00 |
860.00 |
| Dividend - Equity |
169.60 |
168.14 |
SHARE CAPITAL
During the year, there was an increase in paid-up equity share capital
by Rs. 2.23 crores, consequent to the allotment of shares upon exercise of stock options
by employees under the Company's employee stock option scheme and the allotment of equity
shares pursuant to the conversion of Compulsorily Convertible Debentures allotted on 5
October, 2023. As at 31 March, 2026 the total paid-up equity share capital of the Company
is Rs. 170.48 crores.
OPERATIONS
The financial year 2025-26 saw steady and disciplined growth for the
Company, driven by sustained growth across product segments. Unsecured portfolios
stabilised following regulatory recalibration, with improved origination quality
supporting portfolio resilience. Asset quality improved across product segments and
liquidity remained robust, underpinned by prudent underwriting, diversified funding, and
strong balance sheet management.
The Company has crossed the milestone of achieving highest ever
disbursals at Rs. 1,11,642 crores in FY 2025-26 with YoY growth at 11%. Disbursements in
Vehicle Finance (VF) business grew by 15% in FY 2025-26 to Rs. 62,123 crores.
Disbursements in Loan against property (LAP) business grew by 14% to Rs. 20,459 crores in
FY 2025-26. Disbursements in Home Loans (HL) stood at Rs. 7,363 crores in FY 2025-26,
which is a marginal de-growth of 1% YoY. Disbursements in Small and Medium Enterprises
(SME) stood at Rs. 7,312 crores in FY 2025-26 which is a de-growth of 6% YoY.
Disbursements in Consumer and Small Enterprise Loans (CSEL- Consol) stood at Rs. 10,249
crores which is a de-growth of 18% YoY. Disbursements in Secured Business & Personal
Loans (SBPL) grew by 27% in FY 2025-26 to Rs. 1,667 crores. The business AUM of the
Company stood at Rs. 2,24,334 crores which is a growth of 21% YoY. The
profit before tax of the Company for FY 2025-26 is Rs.6,961 crores as against Rs. 5,737
crores for FY 2024-25, which is a growth of 21% YoY. The Company holds a management
overlay of Rs. 200 crores as of 31 March, 2026 towards potential adverse impact of
geopolitical risks on the loan portfolio of the Company. The Company continues to hold a
strong liquidity position with Rs. 20,692 crores as cash and liquid asset balances as at
end of March 2026 (including Rs. 4,152 crores invested in Gsec & SDL, Rs. 1,100 crores
invested in T-Bill & Rs. 829 crores invested in Strips shown under investments), with
a total liquidity position of Rs. 21,186 crores (including undrawn sanctioned lines).
The ALM had no negative cumulative mismatches across all time buckets.
OUTLOOK
The outlook for FY 2026-27 remains stable, underpinned by resilient
domestic demand, sustained infrastructure investment, and continued expansion in formal
credit penetration, even as growth normalises after a strong base. Consumption and credit-
led segments-including automobiles, mortgages and consumer lending are expected to exhibit
healthy and more calibrated growth, supported by improving origination quality, better
risk selection, and underwriting. In unsecured lending, recent moderation and regulatory
interventions have strengthened portfolio resilience, with improving performance of newer
cohorts supporting a gradual recovery in growth momentum. Against this backdrop, the
Company remains well positioned to pursue disciplined growth, safeguard asset quality, and
drive long-term value creation through prudent capital allocation and robust governance.
CHANGE IN NATURE OF BUSINESS
There has been no change in the existing nature of business and
operations of the Company.
DIVIDEND
Dividend distribution policy
The Company has formulated a dividend distribution policy in compliance
with regulation 43A of SEBI (Listing Obligations and Disclosure Requirement) Regulations,
2015 (Listing Regulations), a copy of which is available on the website of the Company. (weblink:
https://files.cholamandalam.com/files/Dividend-Distribution-Policy.pdf)
Payment of dividend
The Company paid an interim dividend on the equity shares at the rate
of 65% (Rs. 1.30/- per equity share) as approved by the Board on
30 January, 2026 for the year ended 31 March, 2026. The Directors' are
pleased to recommend a final dividend of 35% (Rs. 0.70/- per equity share) on the equity
shares of the Company. Upon approval by the shareholders, the total dividend for the year
ended 31 March, 2026 shall amount to 100% (Rs. 2/- per equity share). The dividend
recommended is in accordance with the Company's Dividend Distribution Policy, within the
prescribed ceiling and in compliance with the framework laid down under the RBI Master
Directions.
TRANSFER TO RESERVES
The Company transferred a sum of Rs. 1,050 crores to the statutory
reserve as required under the Reserve Bank of India Act, 1934.
FIXED DEPOSITS
The Company is a non-deposit taking NBFC. The Company does not hold or
accept deposits as at the date of balance sheet.
LICENSES HELD
The Company is registered as a Non Banking Financial Company -
Investment and Credit Company (NBFC- ICC). The Company also holds a license to carry on
the factoring business (NBFC-F). The Company is categorised as an NBFC in Upper Layer
(NBFC-UL) by the Reserve Bank of India under the RBI Master Directions. The Company also
holds a Composite Corporate Agency License issued by the Insurance Regulatory and
Development Authority of India, enabling it to carry on the business of a corporate
insurance agent.
CAPITAL ADEQUACY
The Company's capital adequacy ratio was at 19.21% as on
31 March, 2026 well above the statutory minimum capital adequacy
threshold of 15% set by RBI. The Common Equity Tier 1 (CET1) capital was at 14.40% and
Tier I capital was at 14.73% as against the statutory minimum requirement of 9% and 10%
respectively. Tier II capital was at 4.48% as on 31 March, 2026.
EMPLOYEE STOCK OPTION (ESOP) SCHEME
Pursuant to the approval accorded by the shareholders on 3 January,
2017, the Nomination and Remuneration Committee formulated an employee stock option scheme
2016 (ESOP 2016). During the year, the Company made grants aggregating to 13,94,443
options to 198 employees. As at 31 March, 2026, the total number of options outstanding
under ESOP 2016 is at 58,87,750 comprising both vested (exercisable) and unvested options.
The scheme is in compliance with the Securities and Exchange Board of
India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB
Regulations) and the provisions of the Companies Act, 2013 (the Act). A certificate from
the secretarial auditor, M/s. BP & Associates, Company Secretaries confirming the
implementation of ESOP 2016 in accordance with the SEBI (SBEB) Regulations and the
shareholders' resolutions has been obtained and will be available for inspection by the
shareholders at the ensuing annual general meeting (AGM). The details of the scheme as at
31 March, 2026 and the certificate are disclosed on the website of the Company. (weblink: httDs://www.cholamandalam.com/ investors/esop)
DIRECTORS
Appointment / Re-appointment
Mr. Vellayan Subbiah was appointed as a Whole-time Director, designated
as Executive Chairman for a term of five years commencing from 1 April, 2025 to 31 March,
2030. The appointment was approved by the shareholders on 28 April, 2025 by way of a
postal ballot. Mr. Anand Kumar was re-appointed as an Independent Director of the Company
for a second consecutive term of five years commencing from 16 March, 2026 to 15 March,
2031. The re-appointment was approved by the shareholders on 8 March, 2026 by way of a
postal ballot.
Mr. Ravindra Kumar Kundu, Managing Director, who retires by rotation at
the ensuing AGM and being eligible, has offered himself for re-appointment and is
recommended to the shareholders for approval.
All Directors have confirmed that they satisfy the 'fit and proper'
criteria as prescribed under the RBI (Non-Banking Financial Company - Governance)
Directions, 2025.
DECLARATION FROM INDEPENDENT DIRECTORS
All the Independent Directors (IDs) have submitted their declarations
of independence, as required pursuant to section 149(7) of the Act, confirming that they
meet the criteria of independence as provided under section 149(6) of the Act. In the
opinion of the Board, the IDs fulfil the conditions specified in the Act and the rules
made thereunder for appointment as IDs including integrity, expertise, experience and
proficiency and confirm that they are independent
of the management. All the IDs of the Company have registered their
names in the data bank of IDs and have completed the online proficiency self-assessment
test within the timeline notified by the Ministry of Corporate Affairs (MCA).
KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of section 203 of the Act read with the
rules made thereunder, the following employees are the wholetime key managerial personnel
of the Company as at the date of this report:
a) Mr. Vellayan Subbiah, Executive Chairman
b) Mr. Ravindra Kumar Kundu, Managing Director
c) Mr. D. Arulselvan, Chief Financial Officer and
d) Ms. P. Sujatha, Company Secretary
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors' responsibility statement as required under section
134(5) of the Act, reporting the compliance with accounting standards, is attached and
forms part of the Board's report.
SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant or material orders passed by any regulators,
courts or tribunals that would impact the going concern status of the Company or its
future operations.
MATERIAL CHANGES OR COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE
COMPANY
There were no significant or material changes or commitments affecting
the financial position of the Company that occurred between the end of the financial year
and the date of this report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis report (MDA), highlighting
business-wise details is attached and forms part of this report. The MDA also contains
details of the Company's risk management framework, including the development and
implementation of risk management policy and the key risks faced by the Company.
CORPORATE GOVERNANCE REPORT
A report on Corporate Governance, as required under the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is
attached and forms part of this report. The report also contains details required to be
disclosed including the composition and category of Directors, number of meetings of the
Board, composition of various committees, annual Board evaluation, remuneration policy,
criteria for Board nomination and senior management appointments, whistle blower policy /
vigil mechanism, disclosure of relationships between Directors inter-se, state of
Company's affairs, and other related matters.
The Managing Director and the Chief Financial Officer have submitted a
compliance certificate to the Board in respect of the financial statements and other
matters, as required under regulation 17(8) of the Listing Regulations.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of Regulation 34(2)(f) of Listing Regulations read with SEBI
Master Circular dated 30 January, 2026 (as amended from time to time), the Business
Responsibility and Sustainability Report (BRSR) and the Reasonable Assurance report of the
BRSR Core are attached and forms part of this report.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance
with the Act and the relevant accounting standards and forms part of this annual report.
AUDITORS
M/s. B.K. Khare & Co., Chartered Accountants and M/s. KKC &
Associates LLP, Chartered Accountants are the joint statutory auditors of the Company.
They were appointed at the 46th AGM held on 26 July, 2024 for a term of three years
commencing from the conclusion of 46th AGM until the conclusion of 49th AGM. The statutory
auditors' report which is attached to the financial statements and forms part of this
report, does not contain any qualifications, reservations, adverse remarks or disclaimers.
SECRETARIAL AUDIT
M/s. BP & Associates, Company Secretaries are the Secretarial
Auditors of the Company. They were appointed as secretarial auditors at the 47th AGM held
on 31 July, 2025 for a term of 5 years commencing from FY 2025-26 to FY 2029-30. The
Secretarial Audit Report forms part of this report and does not contain any
qualifications, reservations, adverse remarks or disclaimers.
COST RECORDS AND COST AUDIT
The maintenance of cost records and the requirements of cost audit as
prescribed under the provisions of section 148(1) of the Act are not applicable to the
business activities carried out by the Company.
ANNUAL RETURN
In accordance with sections 134(3)(a) and 92(3) of the Act, the annual
return in form MGT-7 is placed on the website of the Company and is available on the weblink: httDs://www.cholamandalam.com/ investors.
CORPORATE SOCIAL RESPONSIBILITY
Cholamandalam positions itself as the "Capital for Change" to
drive deep, long-term social impact. The Company's philosophy moves beyond basic funding
by channelising its CSR investments across nine interconnected national development
pillars - with an overarching environmental focus - via a National Development Blueprint
of Viksit Bharat 2047.
This strategic mission actively empowers four core community pillars.
Aarthik Engine: Supporting small shop owners and the transport ecosystem. Annadata:
Empowering small and marginal farmers. Thulir: Nurturing economically weaker students and
young athletes through education and sport. Sanrakshanam: Preserving heritage and
monuments to elevate India's cultural legacy.
The Company has been carrying out corporate social responsibility (CSR)
activities for many years even prior to such activities being mandated under the Act. The
Company has in place a Board approved CSR policy. The policy and details on the
composition of CSR committee and projects approved by the Board are available on the
website of the Company. (Weblink:
httos://files.cholamandalam. com/files/csr-Dolicv-2026.Ddf )
In accordance with the provisions of the Act, the Company is required
to spend at least 2% of the average net profits of the Company made during the three
immediately preceding financial years, which aggregated to Rs. 91.14 crores (after
adjusting the excess amount of Rs. 1 crore pertaining to FY 2024-25). During FY 2025-26,
the Company spent Rs. 91.19 crores and the excess amount of Rs. 0.05 crore shall be
carried forward and adjusted against the CSR expenditure for FY 2026-27. The details of
the CSR activities are annexed hereto and forms part of this report.
INTERNAL FINANCIAL CONTROLS
The Company has in place a comprehensive and adequate Internal control
framework including clear delegation of authority and standard operating procedures that
are established and implemented across all businesses and functions. The framework is
reviewed periodically at various levels. The risk and control matrices are reviewed on a
quarterly basis and control measures are tested and documented. These measures have helped
in ensuring the adequacy of internal financial controls commensurate with the size, scale
and complexity of operations of the Company. The internal financial controls with
reference to the financial statements were tested and found to be adequate.
RELATED PARTY TRANSACTIONS
The Company has in place a robust process for approval of transactions
with related parties. The policy on related party transactions as approved by the Board is
available on the website of the Company (weblink: https://SJes.chpJamandaJam.cpm/SJes/rgtz
2026.pdf ). All
contracts, arrangements and transactions with related parties that were entered into
during the financial year were in the ordinary course of business and on an arm's length
basis. There were
no materially significant transactions with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a potential conflict with
the interests of the Company at large. Accordingly, there were no contracts or
arrangements entered into with related parties during the year that are required to be
disclosed under sections 188(1) and 134(h) of the Act in form AOC- 2. An omnibus approval
of the Audit Committee was obtained at the beginning of the financial year for the
transactions proposed to be entered into by the Company with related parties including any
unforeseen transactions up to Rs. 1 crore per transaction per party. The disclosures
required under the Industry Standards on "Minimum information to be provided to the
Audit Committee and Shareholders for approval of Related Party Transactions" (as
amended from time to time), were duly provided to the Audit Committee. The transactions
entered into pursuant to the approval so granted were placed before the Audit Committee
for its review on a quarterly basis.
INFORMATION AS PER SECTION 134(3)(m) OF THE ACT
During the year under review, the Company had no major impact on
account of conservation of energy or technology absorption. Foreign currency expenditure /
remittances amounting to Rs. 2,088.17 crores towards repayment of overseas borrowing and
interest, travel and other professional charges were incurred during the year under
review. The Company does not have any foreign exchange earnings.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Being an NBFC, the Company is exempt from the disclosure requirements
relating to particulars of loans given, guarantees given and security provided under the
provisions of section 186(11) of the Act. With regard to investments made by the Company,
the relevant details are provided in note 10 to the standalone financial statements and
note 12 to the consolidated financial statements of the Company for the year ended 31
March, 2026.
DISCLOSURE OF REMUNERATION
The disclosure with respect to remuneration as required under section
197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is attached and forms part of this report.
PARTICULARS OF EMPLOYEES
In accordance with section 136 of the Act, the financial statements are
being sent to the members and others entitled thereto. The statement prescribed under rule
5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is available for inspection of the shareholders at the ensuing annual general
meeting (AGM). Any member interested in obtaining a copy, may send an e-mail to the
Company Secretary in this regard.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
The Company has complied with all the provisions of Secretarial
Standards issued by the Institute of Company Secretaries of India in respect of meetings
of the Board of Directors and General Meetings held during the year.
INTERNAL COMPLAINTS COMMITTEE
The Company has in place a policy for the prevention of sexual
harassment in line with the requirements of the Sexual Harassment of Women at the
Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). The Company has
complied with the provisions relating to constitution of internal complaints committee
(ICC) under the POSH Act. ICC has been set up to redress complaints received regarding
sexual harassment. All employees including contract workers, probationers, trainees,
apprentices or any person so employed at the workplace by any other such name are covered
under this policy. During the year, the Company conducted awareness for employees on the
POSH Act. E-learning modules were also rolled out during the year to create awareness on
the POSH Act. The details on complaints received under this policy are provided in the
report on corporate governance (refer page no. 92).
OTHER DISCLOSURES
No fraud was reported by the auditors of the Company under section 143
(12) of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014
during FY 2025-26 requiring disclosure in the Board's report.
During the year ended 31 March, 2026, the Company had not made any
application under the Insolvency and Bankruptcy Code, 2016 ("the Code"). As at
31 March, 2026, total number of applications filed and pending under the Code are 10 cases
amounting to Rs. 42.41 crores. No proceedings are pending against the Company under the
Code. Further, during the year, the Company had not entered into any one-time settlement
with banks or financial institutions.
The Company has complied with the relevant provisions relating to the
Maternity Benefits Act, 1961.
HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES / ASSOCIATES AND JOINT
VENTURES
CHOLAMANDALAM SECURITIES LIMITED (CSEC)
During FY 2025-26, CSEC remained focussed on maintaining operational
efficiency and strengthening its business and demonstrated resilience in spite of market
challenges. CSEC achieved a gross income of Rs. 92.54 crores and a Profit before Tax of
Rs. 10.80 crores during the year ended 31 March, 2026. As at 31 March, 2026, the Company
directly holds 92% of equity share capital of CSEC with the balance 8% held through
Cholamandalam Leasing Limited, thereby making CSEC a wholly owned subsidiary.
CHOLAMANDALAM LEASING LIMITED (CLL) (FORMERLY KNOWN AS CHOLAMANDALAM
HOME FINANCE LIMITED)
During the year, the Board and shareholders of CLL approved amendments
to the Object clause of the Memorandum of Association enabling the company to undertake
activities relating to fleet operations and mobility solutions services. CLL recorded a
gross income of Rs. 2.71 crores for the year ended 31 March, 2026 and incurred a Profit
before Tax of Rs. 1.25 crores as against a loss of Rs. 0.45 crores in the previous year.
As at 31 March, 2026, CLL is a wholly owned subsidiary of the Company.
PAYSWIFF TECHNOLOGIES PRIVATE LIMITED (PTPL)
During the year, PTPL submitted an application to the RBI seeking
approval to act as a Payment Aggregator. The review of application by regulator is under
process. PTPL recorded a gross income of Rs. 100.24 crores for the year ended 31 March,
2026 and reported a Profit before Tax of Rs. 6.72 crores as against a profit of Rs. 6.27
crores in the previous year. As at March 31,2026, the Company holds 74.63% of the equity
share capital of PTPL.
ACKNOWLEDGEMENT
The Directors wish to thank the Company's customers, regulators,
vehicle manufacturers, dealers, channel partners, banks, mutual funds, rating agencies and
shareholders for their continued support. The Directors also place on record their
appreciation for the valuable contribution made by the employees of the Company to the
Company's operations during the year under review.
