Published on July 9, 2007
Slide1: M Anandan Managing Director Cholamandalam Investment andamp; Finance Co. Ltd. Business Performance Overview Contents: Contents Business overview Product Mix Distribution Funds Spreads Growth in Financials Results of I Half 2005-06 Looking Ahead Slide3: Among the leading domestically owned NBFCs Asset base of over Rs.2000 crores Focused on automobile finance Rs.1200 crores of Disbursements per annum Cholamandalam Highlights A Focused Retail Finance Company: A Focused Retail Finance Company Automobile Finance accounts for 85% of assets Corporate andamp; Mortgage Finance – limited, profitable presence About 10% of assets Select clientele High quality assets Product Mix Automobile Finance : Focus on Core Products: Automobile Finance : Focus on Core Products Commercial Vehicles is the focus Leader in 3-wheelers, LCVs Product Mix Slide6: Specific Focus areas in each segment Product Segments All India – strong in South, West & North: All India – strong in South, West andamp; North Present in 120 locations across India 40 own branches Over 50% of disbursements in West and North Focus on B andamp; C towns Distribution Diverse & Actively Managed: Diverse andamp; Actively Managed Total funds of over Rs.2000 crores Highest Credit Rating for short-term debt andamp; ABS(P1+, AAA(so)) Long Term Debt rated LAA with positive outlook Diversified sources for risk management Robust ALM processes Source of Funds Maintained by product mix, low-cost funds and low operating cost: Maintained by product mix, low-cost funds and low operating cost Spread Disbursements: Disbursements CAGR 21% * Annualised Growth 2001-05 Rs. Crores Assets: Assets CAGR 22.5% * Annualised Growth 2001-05 Rs. Crores Includes Securitised Assets Profits: Profits CAGR 21.5% * Annualised Growth 2001-05 Rs. Crores HighlightsFirst Half of 2005-06: Highlights First Half of 2005-06 Growth in Disbursements: Growth in Disbursements Rs. Crores H1 FY 06 Overall Growth – 22% HCV Growth – 30% LCV Growth – 24% Costs Controlled: Costs Controlled H1 FY 06 Improved Quality of Assets: Improved Quality of Assets Lower delinquencies in originations of last 18 months Reduction in repossession levels Drop in 'early default' H1 FY 06 NPAs as % of Risk Weighted Assets Spreads Impacted: Spreads Impacted H1 FY 06 Profits: Profits Rs. Crores H1 FY 06 Higher PBT includes gain on sale of investments Growth of 14% Focus on Used Vehicles Finance for better yields Now at around 27% of disbursements Subsidiaries: Subsidiaries Performing well 60% Growth in Income Contribution to PBT increased from loss of Rs. 320 lakhs (H1 05) to Rs. 69 lakhs (H1 06) AMC : assets up from Rs.1025 crores in April 05 to over Rs.1700 crores H1 FY 06 Rs. Lakhs First Half 2004-05 – A Summary : First Half 2004-05 – A Summary * Includes gain on sale of investments H1 FY 06 Initiatives for Long Term health : The Response Initiatives for Long Term health Continuous Review and Revision of Product Mix More 3-wheelers Commenced new products with higher spreads Used Car Finance Further reduction in Loan Losses Leveraging existing customer base for cross selling Continuous management of resources to ensure low cost of funds Geographic expansion for sustained top-line growth - Commenced business in East Pressure on spreads due to intense competition The Challenge H1 FY 06 Looking Ahead: Looking Ahead Automobile Finance: Sustain Growth & Profitability by building key strengths : Automobile Finance: Sustain Growth andamp; Profitability by building key strengths Managing Growth Sales Nationwide Distrbn. Mfr andamp; Dealer Relationships Credit Origination Customer Service Transaction Processing CRM Technology Risk andamp; Cost Management Strong Recovery Systems Disciplined Management of all Risks Effective Cost Control Funds High Credit Rating Low cost of funds Treasury Capability Future Revenue Growth : Future Revenue Growth Automobile Finance Achieve growth while maintaining optimal yield Maintain leading position in LCVs, 3-wheelers Increase share of used vehicles finance Launch other Retail Finance products in JV with DBS Bank New Products in Retail Finance Cholamandalam + DBS : Plans: Cholamandalam + DBS : Plans Effectively leverage the strengths of both partners DBS: Products, Processes Cholamandalam: Distribution, Brand Enter and scale-up in new products Personal loans Home Equity Mortgage Finance Leverage the association to enhance capabilities in raising funds at lower cost Build a powerful financial services franchise and brand Cholamandalam – A Summary: Cholamandalam – A Summary A large, all-India player focused on Automobile Finance A well-established track record of growth with prudence Pursuing quality growth – in association with DBS Bank Slide27: Certain of the statements included in this presentation may be forward looking statements made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Cholamandalam and its subsidiaries. There can be no assurance that future developments affecting Cholamandalam and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties,and there are important factors that could cause actual results to differ,possibly materially,from expectations reflected in such forward-looking statements. Cholamandalam does not intend,and is under no obligation, to update any particular forward-looking statement included in this presentation. Thank You.: Thank You.