Cholamandalam Financial reports strong Q3 FY25 performance with 26% revenue growth

Cholamandalam Financial Holdings Limited has reported robust financial results for the third quarter and nine-month period ending December 31, 2024. The company’s impressive growth trajectory highlights its strategic resilience in navigating India‘s dynamic financial landscape. With consolidated profit growth and a sharp increase in revenue, Cholamandalam Financial Holdings Limited has solidified its position as a key player in the financial services sector.

How did Cholamandalam Financial Holdings achieve 26% revenue growth in Q3 FY25?

Cholamandalam Financial Holdings Limited’s consolidated total income for Q3 FY25 surged to ₹8,593 crore, marking a 26% growth compared to ₹6,842 crore in the same quarter of the previous fiscal year. This significant revenue growth is attributed to the company’s diversified financial portfolio and strong operational strategies across its key subsidiaries.

The company’s consolidated profit after tax (PAT) for the quarter reached ₹1,093 crore, a 6% increase from ₹1,027 crore in Q3 FY24. For the nine-month period ending December 31, 2024, the consolidated PAT stood at ₹3,378 crore, reflecting a 25% growth compared to ₹2,707 crore in the corresponding period of the previous year.

Experts suggest that this growth is driven by strategic investments, robust disbursement volumes, and effective cost management across business verticals. The company’s ability to adapt to evolving market conditions, coupled with its focus on expanding its customer base, has played a crucial role in sustaining this upward trend.

What contributed to the strong performance of Cholamandalam’s key subsidiaries?

Cholamandalam Investment & Finance Company Limited, in which Cholamandalam Financial Holdings holds a 44.35% stake, significantly contributed to the company’s consolidated growth. The subsidiary disbursed ₹25,806 crore in Q3 FY25, representing a 15% increase from ₹22,383 crore in the same quarter of the previous fiscal year. Its PAT for the quarter rose 24% to ₹1,087 crore compared to ₹876 crore year-on-year. Over the nine-month period, PAT grew by 27%, reaching ₹2,992 crore from ₹2,365 crore in the previous year.

The company’s assets under management (AUM) witnessed substantial growth, rising by 34% to ₹1,89,141 crore as of December 31, 2024, compared to ₹1,41,143 crore a year earlier. This surge reflects the company’s expanding footprint in India’s financial sector and its strong customer acquisition strategies.

Another key contributor was Cholamandalam MS General Insurance Company Limited, where the company holds a 60% stake. The subsidiary registered a 19% growth in gross written premium (GWP), amounting to ₹2,175 crore in Q3 FY25, compared to ₹1,827 crore in the corresponding period of the previous year. For the nine-month period, GWP increased by 14%, reaching ₹6,340 crore against ₹5,542 crore in the previous year.

Despite the growth in premiums, the subsidiary’s PAT for the quarter declined sharply to ₹2 crore from ₹153 crore in Q3 FY24. This decline was primarily due to changes in the fair value of equity instruments. However, for the nine-month period, PAT showed a 6% growth, rising to ₹366 crore from ₹346 crore in the previous year, indicating resilience despite market volatility.

Cholamandalam MS Risk Services Limited, a joint venture where Cholamandalam Financial Holdings holds a 49.5% stake, also reported strong performance. Its total income for the quarter rose to ₹21.46 crore, up from ₹17.57 crore in Q3 FY24. The company’s PAT for the quarter grew to ₹1.82 crore, compared to ₹1.24 crore in the same period last year. For the nine-month period, PAT increased to ₹3.44 crore from ₹2.33 crore, driven by enhanced operational efficiency and risk management services.

What do Cholamandalam’s standalone financial results reveal about its growth strategy?

On a standalone basis, Cholamandalam Financial Holdings Limited reported steady growth. The total income for Q3 FY25 stood at ₹2.96 crore, slightly higher than ₹2.85 crore in the corresponding quarter of the previous year. PAT for the quarter nearly doubled to ₹1.89 crore from ₹0.97 crore, reflecting improved operational efficiency. For the nine-month period, PAT rose to ₹26.80 crore, up from ₹24.93 crore in the previous year.

This steady growth indicates the company’s strategic focus on consolidating its core business while leveraging opportunities in emerging financial sectors. Cholamandalam’s diversified business model and prudent investment approach have helped mitigate risks associated with market fluctuations.

What is the outlook for Cholamandalam Financial Holdings in the evolving financial landscape?

Cholamandalam Financial Holdings Limited’s strong performance in Q3 FY25 reflects its ability to adapt to changing economic conditions while maintaining robust growth across its subsidiaries. The company’s focus on expanding its financial services portfolio, enhancing digital capabilities, and strengthening risk management frameworks is expected to drive future growth.

Industry analysts believe that Cholamandalam’s emphasis on assets under management growth, strategic disbursement practices, and diversified revenue streams positions it well to capitalise on India’s evolving financial ecosystem. The company’s resilience in the face of economic uncertainties highlights its potential for sustained growth in the coming quarters.

As India’s financial services sector continues to evolve, Cholamandalam Financial Holdings Limited is likely to focus on innovation, customer-centric solutions, and strategic partnerships to maintain its growth momentum.