Chola Q2 profit rises 41% to Rs 1,630 crore; QIP approved
Cholamandalam's July-September profit rose 41% to Rs 1,630 crore as loans grew 25%, and its board cleared a Rs 5,000 crore share sale to institutions.
Cholamandalam Investment and Finance, the Murugappa Group lender best known for vehicle loans, reported a consolidated profit of about Rs 1,630 crore for the July-September quarter of 2026-27 (Q2 FY27), up 41% from Rs 1,155 crore a year earlier. Its board met on 28 October 2026 and also approved raising up to Rs 5,000 crore through a qualified institutions placement (QIP). The results were reported by Elets BFSI, Whalesbook and Investywise, which cite the company's filings.
What the results show
Loans under management (the total book the company runs) grew 25% to Rs 2.68 lakh crore at 30 September 2026. Disbursements, the new loans paid out in the quarter, rose 47% to Rs 35,872 crore, according to Elets BFSI. Consolidated total income was Rs 9,394.51 crore, up 23%, per Investywise. Elets adds that profit before tax rose 40% to Rs 2,188 crore and that first-half profit was Rs 3,284 crore, up 43%.
Outlets differ slightly on the profit basis: consolidated profit is Rs 1,630.34 crore and standalone is Rs 1,630.07 crore, both about 41% higher.
By product, Elets reports vehicle finance, the biggest business, grew 21% to Rs 1.30 lakh crore, loans against property grew 24% to Rs 57,447 crore, and home loans grew 24% to Rs 25,240 crore. SME loans grew 45% from a smaller base, and gold loans, run through 308 branches, reached Rs 3,446 crore.
How the loan quality looks
Gross NPA (loans overdue by 90 days or more, measured under RBI norms) was 4.44%, down from 4.50% in June, and net NPA, after provisions, was 2.92%, down from 2.95%. Elets also reports a stricter internal measure, "Stage 3" assets, at 3.25% against 3.29%. Net credit losses were Rs 874 crore, 3% lower than a year earlier.
The improvement is small. A 4.4% gross NPA is not low by the standard of big banks, but vehicle lenders usually run higher because their customers are small transporters and first-time buyers with uneven incomes.
What a QIP is and why Chola wants one
A qualified institutions placement is a way for a listed company to sell new shares only to large institutions, such as mutual funds and insurers, without a full public offer. It is quicker and cheaper than a rights issue or public sale. Chola's board said it may be done in one or more tranches, on SEBI rules and subject to approvals. Whalesbook notes it could dilute existing shareholders, meaning each share would represent a slightly smaller slice of the company.
A lender needs capital to keep growing, because regulators require it to hold a cushion against losses. Elets reports Chola's capital adequacy ratio was 20.62% against a 15% minimum, so it is not short of capital. The sources do not state why the raise is being made now, and Investywise says only that proceeds would support growth and capital needs.
Funding costs and the wider picture
Elets notes that tighter system liquidity and rising certificate-of-deposit rates are pushing up funding costs for non-bank lenders. Elets reports Chola's net interest margin was held at 7.9% and its return on equity was 19.43%. Elets says the shares traded about 5% higher after the announcement.
What it means for borrowers, investors and lenders
Chola finances trucks, cars and tractors, so its growth is a reading on demand from small transport and rural borrowers. For those borrowers, a well-capitalised lender with 308 gold-loan branches and a growing home-loan book has room to keep lending even as funding costs rise. For investors, the main questions are the size of dilution and the price at which the QIP is done. None of this is a recommendation to buy or sell.
What to watch next
- The date, price and tranches of the QIP, which are not yet known.
- Whether gross NPA keeps falling in the October-December quarter.
- Funding costs, as certificate-of-deposit rates and liquidity change.
Key takeaways
- Chola's consolidated profit rose about 41% to Rs 1,630 crore in July-September 2026, per three outlets citing company results.
- Loans under management grew 25% to Rs 2.68 lakh crore and disbursements rose 47% to Rs 35,872 crore.
- Gross NPA edged down to 4.44% from 4.50%, a small improvement.
- The board cleared a QIP of up to Rs 5,000 crore, with timing and price still undisclosed.
Sources
- [Elets BFSI: Cholamandalam Finance Q2 FY27, profit jumps 41% to Rs 1,630 crore, board clears Rs 5,000 crore QIP](https://bfsi.eletsonline.com/cholamandalam-q2-fy27-profit-41-percent-1630-crore-disbursements-47-percent-5000-crore-qip/)
- [Whalesbook: Cholamandalam Finance Q2 PAT jumps 41% to Rs 1,630 crore; QIP approved](https://www.whalesbook.com/corporate-news/English/bankingfinance/Cholamandalam-Finance-Q2-PAT-Jumps-41percent-to-Rs-1630-Crore-QIP-Approved/6ae1ab5cc6c6dccbb9095617)
- [Investywise: Chola Q2 FY27 profit up 41%, approves Rs 5,000 crore QIP](https://www.investywise.com/chola-board-meeting-outcome-fund-raising-approval)
Tags: Cholamandalam NBFC Quarterly results Vehicle finance QIP