Cholamandalam profit rises 40.59% as margin reaches 70.30%
Revenue growth outpaced expense growth, while management reported 40% HCV growth in Q2 and home-loan AUM growth of 24% YoY.
Filed 28 Oct 2026, 13:26 IST · Cholamandalam Investment & Finance Company Ltd (CHOLAFIN)
Key takeaways
- Consolidated net profit rose +40.59% YoY to Rs 1,630.34 cr as revenue grew +25.40% while expenses grew +13.39%.
- Operating margin widened 3.14 percentage points YoY to 70.30%, marking its fourth consecutive quarterly increase from Q2FY26.
- Other income contributed only 0.06% of pre-tax profit, so the +40.59% YoY net-profit growth was not driven by non-operating income.
Price around the results
Commercial vehicles led Q2FY27 growth
Consolidated revenue grew +25.40% YoY and +6.08% QoQ, with expense growth slower at +13.39% YoY and +5.19% QoQ. Management said HCV sales grew 40% in Q2 and reached the segment’s highest-ever first-half sales. The company also said home-loan AUM grew 24% YoY.
Lower cost growth lifted the operating margin
Revenue growth outpaced expenses, widening operating margin by 3.14 percentage points YoY and 0.25 percentage points QoQ. Interest expense still rose +23.23% YoY and +8.16% QoQ, which helps explain why pre-tax profit fell -1.58% QoQ despite the margin improvement. The tax rate was 0.45 percentage points lower YoY, providing a modest additional lift to net profit.
Margin has risen for four straight quarters
Operating margin has increased from 67.16% in Q2FY26 to 70.30% in Q2FY27, following sequential gains through the past four quarters. Cholamandalam’s margin was 9.73 percentage points above the 60.57% median among 44 Financial Services peers that had reported the quarter. Other income was only 0.06% of pre-tax profit, limiting the quality concern from non-operating gains.
Management flagged expansion alongside segment risks
Management said it plans calibrated portfolio expansion focused on productive-asset financing, customer cash flows and disciplined credit standards. It also said HCV, LCV, SCV, two-wheeler and construction-equipment demand should maintain positive or steady momentum in the coming periods. The company attributed the Q2 tractor decline to a high base, uneven monsoon conditions and lower Kharif acreage, while saying home-loan credit quality remains monitorable because of disruptions affecting borrower income.
Past result reactions have been mixed
A current post-result market response is not yet available. Across the past eight result reactions, the stock rose three times and fell five times, with a median absolute move of 1.58%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹9,395 cr | ₹8,856 cr | +6.08% | +25.40% |
| Other income | ₹1 cr | ₹102 cr | -98.69% | -98.92% |
| Expenses | ₹2,790 cr | ₹2,652 cr | +5.19% | +13.39% |
| Operating profit | ₹6,605 cr | ₹6,204 cr | +6.46% | +31.28% |
| Operating margin (%) | 70.30% | 70.05% | — | — |
| Interest | ₹4,334 cr | ₹4,007 cr | +8.16% | +23.23% |
| Depreciation | ₹83 cr | ₹75 cr | +10.80% | +17.09% |
| Profit before tax | ₹2,188 cr | ₹2,224 cr | -1.58% | +39.75% |
| Tax | ₹558 cr | ₹567 cr | -1.64% | +37.35% |
| Net profit | ₹1,630 cr | ₹1,656 cr | -1.56% | +40.59% |
| EPS (₹) | ₹19.09 | ₹19.43 | -1.75% | +38.53% |
Operating margin of 70.30% compares with a Financial Services sector median of 60.57% across 44 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- HCV sales grew 40% in Q2 and reached the segment’s highest-ever first-half sales.
- Home-loan AUM grew 24% year over year in Q2 FY27.
Guidance & outlook
- HCV growth is expected to remain steady in the second half.
- The LCV segment has a positive demand outlook going forward.
- SCV growth momentum is expected to continue in the coming months.
- Two-wheeler growth is expected to sustain positive momentum in coming quarters.
- Construction equipment growth is expected to remain steady in coming quarters.
Expansion
- The company plans calibrated portfolio expansion focused on productive asset financing and disciplined credit standards.
- Home Loans plans to deepen reach among first-time buyers in semi-urban and rural markets.
New initiatives
- Home Loans is increasingly using analytics-driven direct outreach and tailored segment-specific products.
- GenAI-powered collections and focused recovery efforts are being used to augment asset quality.
- The company deployed brand monitoring to detect and protect against digital misuse of its brand.
Problems & risks
- The tractor segment declined in Q2 because of a high base, uneven monsoon conditions and lower Kharif acreage.
- Home-loan credit quality remains monitorable because of external disruptions affecting borrower income.
- AHFC operating ratios are expected to remain elevated versus traditional HFCs, although range-bound.
What to watch
- Whether consolidated operating margin holds above 70.30%.
- Whether interest growth moderates from +23.23% YoY.
- Whether home-loan AUM growth remains at 24% YoY while credit quality stays monitorable.