In This Article:
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Gross Direct Premium (Q2): ?2,171 crores, growth rate of 9.2%.
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Gross Direct Premium (Half Year): ?4,092 crores, growth rate of 11.5%.
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Motor Business Growth (Q2): 10.6% against industry growth of 6.2%.
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Expenses of Management (Q2): ?32.18 as against ?29.7 in the corresponding quarter.
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Technology Spend (Half Year): ?56 crores compared to ?37 crores in the corresponding half year.
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Claims Ratio: 72.6% compared to 73.8%, lower by 1.2%.
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Investment Portfolio Corpus (September): ?17,189 crores.
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Investment Income (Q2): ?342 crores.
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PBT (Q2): ?171 crores.
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PBT (Half Year): ?350 crores, includes nonrecurring income of ?22.68 crores.
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Return on Equity (Half Year): 10% (not annualized).
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Solvency Ratio: 2.26 times.
Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cholamandalam Financial Holdings Ltd reported a gross direct premium growth of 9.2% in Q2, outperforming the industry growth of 1.7%.
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The company achieved a half-year top-line growth rate of 11.5%, compared to the industry growth of 6.7%.
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The claims ratio improved by 1.2% to 72.6% from 73.8% in the previous year.
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Investment income for the quarter was robust at ?342 crores, contributing positively to the financial results.
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The company is progressing on digital initiatives, including migrating its private car portfolio to a cloud architecture, enhancing operational efficiency.
Negative Points
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The company's expenses of management increased to ?32.18 in Q2 from ?29.7 in the corresponding quarter, indicating rising operational costs.
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The operating expense ratio increased from 36.3% last year to 37.4%, impacting the combined ratio negatively.
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The motor own damage (OD) loss ratios are higher than historical levels, particularly in the commercial vehicle segment.
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The company faced challenges due to NatCat events, such as floods in Andhra, Telangana, and Surat, impacting financial performance.
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There is uncertainty regarding the regulatory changes affecting long-term policy accounting, which could impact future financial reporting and expense management.
Q & A Highlights
Q: What is the board's plan for value realization for shareholders of Cholamandalam Financial Holdings Ltd? A: Mr. Sridharan Rangarajan, Non-Executive Director, stated that the board has not yet considered this aspect but will take an appropriate call at the right time. Currently, no such discussions have taken place.
Q: The OpEx ratio has increased from 36.3% to 37.4%, impacting the combined ratio. How do you see this playing out in the future? A: Mr. Sridharan Rangarajan explained that the increase is due to tech spending, which will continue into the next year. The company is conservative in recognizing reinsurance commissions, which could improve the combined ratio if no further NatCat events occur.