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Extended monsoons and the cleaning up of the consumer loan segment led to Cholamandalam Investment and Finance Company Limited (CIFCL) seeing a drop in asset quality in the quarter ended September, Arul Selvan, President & CFO, CIFCL, said. Even as CIFCL reported a 20 per cent growth in revenue and profits for the quarter ended September 2025 (Q2FY26), the sequential deterioration of asset quality stood out. CIFCL attributed to a seasonal slowing down of vehicle finance in Q2, when monsoons tend to disturb earning potential of the small transport operators. “In Q2, there is always a little bit of a higher stress on the credit cost,” Selvan said in an interaction with businessline. But this will get corrected in the second half of the year as festive season and macro conditions help in more transport movement, he added. Secondly, the NBFC’s decision to run down its Consumer and Small Enterprise Loans (CSEL) segment by exiting from financial partnerships also contributed to the higher NPAs, he added. CIFCL recently took the decision to wind down the portion of its CSEL business developed through fintech partnerships. Gross NPAs at CIFCL stood at 4.57 per cent in September 2025 compared to 4.29 per cent in June, while Net NPA stood at 3.07 per cent as of September as against 2.86 per cent in June 25. The GST cut has brought two-pronged benefits, Selvan notes. While it has helped in more investment in vehicles, it has also helped uplift rural consumption leading to more transport movement and income for vehicle owners, he noted. The Murugappa Group NBFC is engaged in vehicle finance, home loans, mortgage loans, SME loans and more recently gold loans. With a 21 per cent y-o-y growth in Assets under Management (AUM) as of September 2025, the CFO says that H1 performance has been in line with expectations. The second half is expected to be even better, helping the company achieve the AUM growth target of 20-23 per cent in FY26. CIFCL’s net profit for H1FY26 stood at ₹2,291 crore, up 20 per cent from the same half year last year. Published on November 7, 2025
