Cholamandalam Investment's CFO anticipates improved asset quality despite seasonal woes

Highlighting the company's cautious approach, Selvan mentioned that they would be closely monitoring the unsecured portfolio, especially in collaboration with fintech partners.

"We are moving forward with fintech partnerships in a very controlled manner to align with regulatory guidelines. While there is potential for growth, we will capitalise on it prudently," he added.

Selvan outlined the company's strategic focus on different segments, emphasising that; "Over the next two years, vehicle finance should constitute around 50%, the mortgage business around 35%, and new business around 15%, with unsecured loans not crossing the 10% level."

Furthermore, Cholamandalam Investment and Finance Company has set a target to bring down the gross non-performing asset (NPA) ratio to 3.50% in the future.

Selvan acknowledged the pressure on the tractor segment in certain geographies but remained positive about the overall trajectory.

Discussing financial aspects, Selvan mentioned, "The cost of funds is currently at its peak, and we do not expect it to increase from hereon. We anticipate a growth of 30-32% in FY24 and more than 20% growth in FY25."

Selvan was speaking to CNBC-TV18 days after the company reported a 28.04% rise in its standalone net profit at ₹876.16 crore in the third quarter of the financial year 2023-24.

On sequential basis, net profit was up 14.9 percent. The gross non-performing assets (NPA) of the lender stood at 3.92% against 4.07% in a quarter ago period and 5.37% in the year-ago period.