Cholamandalam Finance Q4 2025 Conference Call #conferencecall #concall #earningscall #cholamandalam – YouTube

Here are the key highlights from the transcript:

1. Company Performance Overview:

• Chola Mandalam Financial Holdings Limited reported a strong Q4 FY25 and full-year results.
• Q4 gross direct premium (GDPI) was ₹229 crore; total GWP for the quarter was ₹2,135 crore.
• Full-year GDPI was ₹8,124 crore, with gross written premium (GWP) of ₹8,328 crore, growing approximately 1.5 times the industry on a 1-by-N basis.
• Long-term non-motor premium received in advance was ₹124 crore for the quarter and ₹250 crore for the year.

1. Business Growth & Distribution:

• The company expanded its distribution channels, entering new OEM relationships and increasing agency strength.
• Business was written in over 1.68 lakh gram panchayats, adding over 5.2 million customers in motor insurance.
• Market share within the motor segment stood at 5.5%, with a composition of 42% in cars, 43% in commercial vehicles, and 15% in two-wheelers.
• 27% of motor premiums came from new vehicles.

1. Financial Metrics & Profitability:

• Expense ratio (excluding 1-by-N adjustments) was 32.18%, below the approved glide path.
• Claims ratio for the year was 73.3%, slightly better than the previous year’s 73.7%, with catastrophic events impacting about 42% of claims.
• Combined ratio for the quarter was 109.3%, translating to 105.7% without 1-by-N effects.
• Full-year profit before tax (PBT) was ₹680 crore, including a one-time income of ₹54 crore from recoveries.
• Return on equity (RoE) averaged around 18.5%.
• Net worth crossed ₹3,000 crore, with 85% of it accumulated through profits.
• Solvency ratio was comfortable at 2.18 times.

1. Investment & Reserves:

• Investment corpus exceeded ₹18,000 crore.
• Q4 saw recoveries of ₹54 crore from earlier investments, including from Reliance Capital and ILFS write-offs.
• Investment income is expected to remain robust, aided by market conditions and unrealized gains.

1. Management Outlook & Future Expectations:

• The company believes its RoE levels (~18%) are sustainable.
• The combined ratio is expected to improve gradually, potentially reaching 102-103% over 2-3 years, aided by industry price revisions and expense management.
• The company is working on digital transformation, including transitioning from legacy systems and enhancing digital capabilities to improve efficiency.
• There is optimism about growth in the commercial lines segment, especially with better pricing environment and increased reinsurance capacity.
• Motor OD (own damage) loss ratios are being managed carefully, with recent improvements noted.

1. Regulatory & Strategic Developments:

• The company clarified that it was not part of the initial regulator discussions on listing general insurers but expects to consider listing in the future.
• Discussions with regulators continue regarding product mix and cost structures, especially for long-term products like dwellings.

1. Additional Notes & Participant Interactions:

• Participants in the call asked about sustainability of RoE, impact of regulatory changes, combined ratio trajectory, and investment write-offs.
• Management emphasized ongoing efforts to improve operational efficiencies, product mix, and pricing strategies.
• A suggestion was made to include reserve triangle tables in future presentations for better transparency.

1. Closing Remarks:

• The management expressed confidence in a positive outlook for the upcoming year, citing growth and profitability improvements.
• The company remains committed to engaging with investors quarterly and is optimistic about industry prospects.

Overall, the key themes are strong financial performance, strategic growth initiatives, focus on digital transformation, prudent risk management, and cautious optimism for future profitability and industry conditions.

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