#1Chola Enter a better life brother BETTER LIVES BETTER NATION Cholamandalam Investment and Finance Company Limited CORPORATE PRESENTATION - September 2023 murugappa#2Chola Enter a better life Table of Contents murugappa 1. Group overview 2. Corporate overview 5. Funding profile 6. Subsidiaries performance B 3. Financial performance BETTER 4. Business segments' overview RISK 7. Environmental Social Governance 8. Risk management 2#3Murugappa Group Overview#4Chola Enter a better life Murugappa Group in a Nutshell 123 Years Years of Existence 3 Sectors murugappa Consolidated $9.0 Turnover ER $38.4 Group Market B cap (as on 30th Sep 2023) (FY23) 23ES 29+ Businesses R 10 NATION Listed Companies 50 Geographical 113 Manufacturing 73,000+ Work force Countries Presence Locations Locations 4#5Chola Enter a better life Murugappa Group Overview Agriculture Market Cap(Cr.) 36,090 Turnover (Cr.) 35,171 PAT(Cr.) 1,541 JA Coromandel PARRYS Market Cap(Cr.) 33,717 9,284 Turnover (Cr.) 29,587 5,584 PAT(Cr.) 1,528 13 murugappa Murugappa Group murugappa Engineering ER Financial services 84,048 19,032 1,739 1,10,827 19,124 2,917 CUMI T Chola Chola MS GENERAL INSURANCE INDIA Enter a better life Chola Financial Holdings 22,368 57,707 1,00,148 NA 21,747 4,601 14,431 12,884 6,156 84 414 1325 2,666 193 58 Note: Market Capitalization of Financial services incl. Chola Investments and Chola Financial Holdings. Financial Performance are of FY 22-23. Market data as on 30th Sep 2023. Source: BSE 5#6Corporate Overview#7Chola Enter a better life SPIRIT OF MURUGAPPA Responsibility Integrity Passion The five lights The values, principles and beliefs that have always guided us and continue to show the way forward. Respect Quality Integrity We value professional and personal integrity above all else. We achieve our goals by being honest and straightforward with all our stakeholders. We earn trust with every action, every minute of every day. Passion We play to win. We have a healthy desire to stretch, to achieve personal goals and accelerate business growth. We strive constantly to improve and be energetic in everything that we do. Quality We take ownership of our work. We unfailingly meet high standards of quality in both what we do and the way we do it. We take pride in excellence. Respect We respect the dignity of every individual. We are open and transparent with each other. We inspire and enable people to achieve high standards and challenging goals. We provide everyone equal opportunities to progress and grow Responsibility We are responsible corporate citizens. We believe we can help make a difference to our environment and change lives for the better. We will do this in a manner that benefits our size and also reflects our humility. "The fundamental principle of economic activity is that no man you transact with will lose, then you shall not." murugappa 7#8Chola Enter a better life Cholamandalam Investment & Finance Company Limited 30.9 lakh customers Helping customers enter better life 2 lakh customers in year 2000 to 30.9 lakh plus customers till date 50,980 employees B Experienced team to serve Experienced team to serve more customers murugappa 200 plus employees in year 2000 to 50,000+ employees today Rs. 1.34 lakh Cr. Total AUM Healthy ROA of 3.3% PAT 10 CAGR of 25% from FY14 to FY23 Rs. 100k+ Cr. market cap Rapid market cap growth TTER St From Rs. 840 Cr. in year 2008 to Rs. 100k+ Cr. in 2023 1267 branches Strong geographical presence Across 28 states/Union Territories 89% presence across tier III-VI towns 41° ₹ Diversified product portfolio Presence across Vehicle Finance loans, Loan Against Property, Home Loans, Consumer loans, Personal loans, SME Loans, Stock broking & distribution of financial products. Note: Employee count includes both on-roll and off-roll • Highly experienced management Highly experienced management team with unrivaled industry experience Significant synergies with Murugappa group, deriving operational and financial benefits 80#9Chola Enter a better life Our journey so far FY 2022 - 23 FY 2021 FY 2016-20 FY 2024 murugappa FY 1979-2010 • Commenced FY 2010-15 equipment financing • . Commenced Vehicle Finance business Started Chola Securities 2011 • Terminated JV with DBS • Mobile app rollout 2012 • Commenced Tractor Business 2006 ⚫ JV with DBS bank Singapore commenced Consumer Finance and Loan Against Property (LAP) Business 2009 2013 • Commenced HL Business • Commenced CE Business 2014 • 2016 New LEAP LOS Digital platform 2017 Gaadi Bazaar dealer platform . 2018 • Gen 3 scoring model .HRMS SaaS solution 101 ETTE 202 2021 • LAP platform • • digitization Digital Data Centre setup Inspite of Covid pandemic CIFCL B th 2019 • PAT crossed Rs.1000 Cr • HL platform digitization of 16% growth in assets and 44% growth in PAT . AI/ML based scoring model 2020 • Maiden issue of Masala Bonds with CDC • Launched Consumer & Small Enterprise Loan (CSEL), Secured Business & Personal Loan (SBPL) and SME Loan (SME) business. • ROA back to Pre- COVID levels. 2023 • Total AUM crossed 1 lakh Cr. 2024 Total AUM crossed 1.3 lakh Cr. • Increased branch network to 1267. • Launched a composite QIP issue of equity shares and CCD aggregating to Rs.4,000 Cr. • Crossed 1lakh crore market cap in Q2FY24. . Reaffirmed as constituent of FTSE4Good Index Series. • Exited Consumer Finance business 2015 • GNPA recognition at 150 Days 9 LMS Loan Management System LOS Loan Origination System AI/ML - Artificial Intelligence / Machine Learning RLH Resident Locations Heads#10Chola Highlights - H1 FY24 (1) Enter a better life Particulars Disbursement H1 FY24 Vs H1 FY23 Disbursement at Rs.41,557 Cr, a growth of 49%. Business AUM Rs. 1,24,246 Cr in Q2 FY24 registering a growth of 42%. NIM PBT PBT - ROTA 7.4% as compared to 7.8% Rs.1,988 Cr, a growth of 31% 3.3% as compared to 3.5% Return on Equity 19.8% as compared to 18.3% Stage 3 (90DPD) 2.96% in Sep23 from 3.84% in Sep22. GNPA (RBI) CAR murugappa 4.07% in Sep23 as against 5.84% in Sep22 and NNPA at 2.59% in Sep23 against 4.07% in Sep22. 16.62%. Tier I at 14.66%. Post the Capital raise in October 2023, the Capital Adequacy ratio will be more than 20% and Tier I will be more than 16.5%. 10 10#11Chola Enter a better life Particulars Highlights - H1 FY24 (II) H1 FY24 Vs H1 FY23 murugappa VEHICLE FINANCE Overview Disbursement PBT LOAN AGAINST PROPERTY Overview Disbursement PBT HOME LOAN Overview Disbursement PBT Well-diversified product portfolio spread across 1215 branches PAN India Focused on financing of Commercial, Passenger, Two-wheelers, Tractors and Construction Equipment in both New and Used Vehicles. Our focus continues to be on retail customers especially in smaller towns and rural areas Disbursement of Rs.23,032 Cr, a growth of 35%. PBT at Rs.1,000 Cr, a growth of 6% Focused on financing of Loan Against Property to SME customers for their business needs and operates out of 618 branches PAN India. Over 79% of the book is financed against Self-Occupied residential property as collateral. Disbursement of Rs.5,872 Cr, a growth of 37%. PBT at Rs.458 Cr, a growth of 21% Focused on providing Home Loans under affordable segment with presence across 625 branches PAN India. 89% of assets are in tier 2,3,4 cities and suburbs of tier 1 cities Disbursement of Rs.3,029 Cr, a growth of 124%. PBT at Rs. 183 Cr, a growth of 15% 11#12Chola Enter a better life Particulars NEW BUSINESS Highlights - H1 FY24 (III) Highlights murugappa CSEL - Offers Personal Loans, Professional Loans & Business Loans to salaried, self-employed professionals and micro & small businesses through traditional DSA/DST model, partnerships and FinTech's. - present in 408 locations (co-located) and have acquired over 8.2 lakh customers as on Sep23. - SBPL - Offers secured business loan and secured personal loan against self-occupied residential property or commercial-cum-residential property as collateral – present in 363 locations (co-located) spread across 10 states as on Sep23. SME - The product suite includes Supply chain financing, Term loans for capex, Loan against shares, Funding on hypothecation of machinery for specific industries. Servicing out of 69 (co- located) locations with business growth both through traditional and Fintech partnerships. Particulars VF LAP HL New Business Businesses Enablers Chola No of Employees 35903 3824 5660 4296 1297 50980 No of Branches 1215 *618 *625 *601 ΝΑ 1267 No of Customers 2111081 45484 86596 851268 ΝΑ 3094429 *610 LAP, 587 HL and 601 new businesses branches are co-located with VF 12 12#13Chola Enter a better life Ecosystem Play in the MSME Sector murugappa Large Larger enterprises largely focused by Banks SME Focused by Medium (SENP) Focused by Chola via SME business since the last 5 years Enter a better life Small (SENP & SEP) Focused by Mini (SENP) Micro (SENP) Chola via LAP business since the last 15 years Enter a better life Chola via CSEL business | New Business Enter a better life Focused by Chola via SBPL | New Business & HL| 5 years Enter a better life Profiles such as street vendors, SHGS etc. with ticket size requirement of < INR 1L focused by MFI /Private finance 13#14Chola Enter a better life Shareholding Pattern Corporate Mutual Bodies Funds 17.77% 3.16% Public 5.73% FII 21.92% Shareholding murugappa Institutional Holders (More than 1%) Top Domestic Institutional Holding BEAxi LIV Axis Mutual Fund . HDFC Mutual Fund SBI Mutual Fund Promoters 51.43% . Birla Sun Life Mutual Fund • Canara Robeco Mutual Fund BETT ATIC Top Foreign Institutional Holding . Capital Group Promoters' share holding of 51.46% includes o Cholamandalam Financial Holdings Limited - 45.34%, Ambadi Investments Limited - 4.10% Others - 1.99% . • Vanguard Blackrock Norges Bank Investment Management White Oak Note: As on 29th Sep 2023 14 14#15Chola Enter a better life Punjab (24) Chandigarh (1) Haryana (40) Strong Geographical Presence Jammu & Kashmir (7) Himachal Pradesh (16) -Uttarakhand (19) murugappa 571 516 540 1145 1191 1204 1267 Delhi (5) Rajasthan (86) UP (79) Bihar (44) Gujarat (65) Madhya Pradesh (86) Dadra & Nagar Maharashtra (138) Haveli (1) Goa (3) Arunachal Sikkim Pradesh (1) FY22 FY23 Q1 FY24 Q2 FY24 Assam (30) Physical Branch ■RL Meghalaya (3) Mizoram (1) 26% 25% 25% 24% Tripura (4) 23% 23% 22% 23% West Bengal (64) Jharkand (29) 22% 22% 22% 22% Chhattisgarh (72) Odisha (59) BETT 28% 30% 31% 31% Telangana (44) Karnataka (83) Andhra Pradesh (55) Andaman & Nicobar (1) Puducherry (2) Tamil Nadu (154) HON FY22 FY23 Q1 FY24 Q2 FY24 ■South North ■West East 7% 13% 7% 13% 7% 6% 12% 12% Kerala (50)- 1267 branches across 29 states/Union territories: 1215 VF, 618 LAP (610 co-located with VF), 625 HL (587 co-located with VF), 408 CSEL, 363 SBPL, 69 SME (all co-located with VF) & 6 locations for Head office Functions and Operations in Tamil Nadu 89% locations are in Tier-III, Tier-IV, Tier V and Tier-VI towns Note: Figures in brackets represents total no. of branches as on 30th Sep 2023. 80% 80% 81% 82% FY22 FY23 Q1 FY24 Q2 FY24 ■Rural Semi-Urban Urban 15#16Financial Performance 9050.56 8600 28 569.005 1200 65 1500.09 100.05 25601.01#17Chola Enter a better life Financial Snapshot -10 Years murugappa FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Financials Snapshot YOY IGAAP IGAAP Disbursements 13,114 12,808 IGAAP 16,380 IGAAP 18,591 INDAS INDAS INDAS INDAS INDAS 25,114 30,451 29,091 26,043 35,490 INDAS CAGR (5 years) CAGR (10 years) 66,532 87% 22% 20% Assets under management 23,253 25,452 29,650 34,167 Total Income 3,263 3,691 4,194 4,660 5,529 7,049 Interest expenses 1,771 1,960 2,051 2,231 2,659 3,589 42,924 54,279 60,549 69,996 76,907 9,576 10,139 4,576 4,299 1,06,498 38% 18% 18% 8,715 12,978 28% 16% 17% 4,592 5,749 34% 13% 14% Net Income 1,492 1,731 2,143 2,430 2,870 3,460 4,123 5,000 5,840 7,229 24% 20% 19% Operating Expenses 658 749 845 1,013 1,115 1,270 1,578 1,583 2,069 2,780 34% 22% 17% Operating Profit Before Loan Losses 834 982 1,298 Loan Losses & Provision 283 325 427 1,416 311 1,754 353 2,190 2,545 3,416 3,771 4,449 18% 19% 20% 367 959 1,378 880 850 -3% 23% 13% Profit before tax 550 657 871 1,106 1,401 1,823 1,586 Profit after tax 364 435 568 719 918 1,186 1,052 2,038 1,515 2,891 3,600 25% 19% 23% 2,147 2,666 24% 22% 25% Ratios Net Income to assets (%) 7.7 6.9 7.7 7.5 7.7 7.0 6.9 7.3 7.9 7.7 Expense to assets (%) 3.4 3.0 3.0 3.1 3.0 2.6 2.6 2.3 2.8 3.0 Losses and provisions (%) 1.5 1.3 1.5 1.0 0.9 0.7 1.6 2.0 1.2 0.9 Return on assets (PBT) (%) 2.8 2.6 3.1 3.4 3.7 3.7 2.7 3.0 3.9 3.8 Cost to Net Income (%) 44.1 43.3 39.4 41.7 41.4 38.9 36.7 38.3 31.7 35.4 Networth 2295 *3173 3657 4285 5098 6176 *8172 9560 11708 14296 Tier I 10.5 13.0 13.3 13.6 13.2 12.6 15.3 15.1 16.5 14.8 CAR (%) 17.2 *21.2 19.7 18.6 18.4 17.4 *20.68 19.1 19.6 17.1 Return on equity (%) 17.1 15.8 16.7 18.1 19.6 20.9 15.2 16.9 20.4 20.6 Earnings per share (Basic) 5.1 6.0 7.5 9.2 11.8 15.2 13.4 18.5 26.2 32.5 Dividend 35% 35% 45% 55% 65% 65% 85% 100% 100% 100% Market Capitalisation 4125 8423 11140 15072 22667 22624 12535 45824 58978 62607 GNPA (%) 1.9 3.1 3.5 4.7 3.4 2.7 3.8 4.0 6.8 4.6 NNPA (%) 0.7 2.0 2.1 3.2 2.2 1.7 2.2 2.2 4.7 3.1 NPA Recognition 6month 5month Branch Network 574 534 4month 534 3month 703 3month 873 3month 900 3month 1091 3month 1137 3month 1145 3month 1191 Capital Infusion Spurt in GNPA in FY20 and FY21 was due to Covid and in FY22 was due to new RBI norms on NPA 17 17#18Chola Enter a better life Disbursements (Cr) 49% Disbursements -Disbursements (%) DE murugappa * 41,557 16% 19% 23% 21% 23% 23% 5% 9,625 5% 5% 15% 7% 7% 7% * 27,953 15% 50% * 47% 3,029 13% 15% 15% 14% * 21,542 5,254 5,872 € 20,015 1,354 * 13,329 4,581 * 14,623 5,044 4,282 1,454 1,575 2,121 3,132 64% 2,679 3,192 57% 58% 61% 611 743 23,032 54% 56% 2,036 2,246 17,063 11,301 11,731 8,562 8,502 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 VF LAP HL/AL New Businesses * Total Disbursements ■ VF ■LAP HL ■New Business New business includes SME, CSEL and SBPL H1 FY24 18#19Chola Enter a better life Assets Under Management Business Assets under Management (*Cr) -Business Assets under Management (%) murugappa * 1,24,246 * 40% 1,14,796 42% D 4% 10% 5% 13,327 7% 10% 11,337 8% 8% 10,801 9% 9,528 22% * * 87,668 81,925 21% 4,765 20% 24,721 20% 2,937 22,866 6,454 5,938 17,675 18,843 68% 66% 62% 75,396 61% 71,065 55,376 57,606 Q1 FY23 Q1 FY24 IVF ■LAP HL Q2 FY23 New Businesses Q2 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 * Total AUM VF ■LAP HL New Businesses New business includes SME, CSEL and SBPL 19#20Chola Enter a better life Chola - Disbursement Mix - H1 FY24 Well diversified product segments murugappa [Disbursements (%) - Product wise SBPL 1% SME 10% 3 Wheeler 1% 2 Wheeler 5% HL 7% CSEL 13% LAP 14% [Portfolio (%) - Product wise SBPL 3 Wheeler 1% 0.4% BETTELS 2 Wheeler 4% 3% 7% HL 9% Used Vehicles 18% Tractor 3% MINI LCV 1% LAP CAR 20% 7% MUV 5% ម៖ CE LCV 3% HCV 9% 3% Used Vehicles 16% Tractor 0.4% MUV CE 6% 4% HCV LCV 4% 12% MINI LCV 2% CAR 7% 20 20#21Chola Enter a better life Profit after tax (Cr) Profitability and Net worth Networth (Cr) 566 28% 726 34% 762 563 32% 1489 murugappa BE28% R *15,027 165 23% *15,773 165 1129 *12,316 164 *12,849 164 15,609 14,862 12,152 12,684 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Reserves and Surplus Q2 FY23 Q2 FY24 I Equity Share Capital 21 24#22Chola Enter a better life Net Income Margin (%) Asset Ratios Expenses Ratio (%) murugappa 8.0% 7.8% 7.6% 7.3% 7.4% 7.4% 3.0% 3.0% 2.9% 2.8% 2.8% 2.7% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Loan Losses & Provisions (%) Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 ROA - PBT (%) 1.5% 3.7% 1.3% 3.5% 1.3% 1.2% 1.3% 1.3% 3.3% 3.4% 3.2% 3.3% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 22 22#23Chola Enter a better life Return on equity (%)- 19.9% 18.9% Shareholders' Returns Ratios Earnings per share (*) 19.8% 19.7% 18.3% 17.8% 27.6 35.5 27.2 36.9 27.4 murugappa 36.2 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 [P/E Ratio' Q1 FY23 Q1 FY24 P/BV Ratio Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 33.0 33.6 32.1 6.2 6.3 6.3 22.4 26.9 26.7 4.1 4.7 4.7 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Note: Ratios are calculated based on the stock price at Rs.1218.60 as on 30th Sep 2023. Source: BSE 23#24Chola Enter a better life Profit and Loss Statement (As per IND AS) Particulars murugappa Cr Growth % H1-o-H1 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 Growth % Q2-o-Q2 H1 FY23 H1 FY24 Disbursements 13,329 20,015 14,623 21,542 47% 27,953 41,557 49% Closing Assets - Managed 86,703 1,22,755 91,841 1,33,775 46% 91,841 1,33,775 46% Income 2,771 4,134 3,038 4,572 51% 5,809 8,706 50% Finance Charges 1,131 2,007 1,340 2,205 65% 2,471 4,212 70% Net Income 1,640 2,127 1,697 2,367 39% 3,337 4,493 35% Expenses 580 787 661 946 43% 1,241 1,733 40% Net Credit Losses 299 372 278 400 44% 577 772 34% PBT 762 968 758 1,021 35% 1,520 1,988 31% Taxes 196 242 195 258 33% 391 500 28% PAT 566 726 563 762 35% 1,129 1,489 32% Asset Ratios Income 13.5% 14.2% 13.6% 14.3% 13.5% 14.3% Cost of Funds 5.5% 6.9% 6.0% 6.9% 5.8% 6.9% Net Income Margin 8.0% 7.3% 7.6% 7.4% 7.8% 7.4% Expense 2.8% 2.7% 3.0% 3.0% 2.9% 2.8% Losses & Provisions 1.5% 1.3% 1.2% 1.3% 1.3% 1.3% ROA-PBT 3.7% 3.3% 3.4% 3.2% 3.5% 3.3% ROA-PAT 2.8% 2.5% 2.5% 2.4% 2.6% 2.4% Gross Stage 3 3,408 3,546 3,375 3,719 3,375 3,719 ECL Provisions - Stage 3 1,387 1,610 1,400 1,760 1,400 1,760 Coverage Ratio - Stage 3 40.7% 45.4% 41.5% 47.3% 41.5% 47.3% Cost to Net Income 35.3% 37.0% 38.9% 40.0% 37.2% 38.6% 24 24#25Chola Enter a better life Balance Sheet (As per IND AS) murugappa Cr Particulars Sep22 Mar23 Sep23 ASSETS Financial Assets 92,222 1,12,075 Cash and Bank balance 3,499 Derivative financial instruments 310 Receivables 174 2,961 273 191 1,35,126 7,852 288 252 Loans 85,477 1,04,748 1,22,889 Investments 2,467 3,628 3,610 Other Financial Assets 295 274 236 Non-Financial Assets 1,327 1,440 1,755 Current tax assets (Net) 218 267 404 Deferred tax assets (Net) 672 609 671 Property, Plant and Equipment 268 372 454 Capital work in progress 30 36 Intangible assets 35 51 42 Other Non-Financial Assets 104 106 184 TOTAL 93,549 1,13,516 1,36,881 EQUITY AND LIABILITIES Financial Liabilities 80,502 Derivative financial instruments Trade Payables - Others Other Payables - Others 168 55 622 Borrowings 79,321 Other Financial Liabilities Non-Financial Liabilities 336 199 Shareholder's fund 12,849 TOTAL 93,549 99,032 134 123 1,065 97,356 354 187 14,296 1,13,516 1,20,875 143 26 924 1,19,470 312 232 15,773 1,36,881 25#26Chola Enter a better life Stagewise Assets & Provision Summary Sep23 murugappa % to GA Cr Jun23 Sep23 Particulars INR Cr Gross Assets 1,15,731 INR Cr 1,25,578 Jun23 % to GA 100.0% 100.0% Stage 1 1,08,126 1,17,818 93.43% 93.82% Stage 2 4,059 4,041 3.51% 3.22% Stage 3 3,546 3,719 3.06% 2.96% Provision 2,499 2,689 2.16% 2.14% Stage 1 477 516 0.44% 0.44% Stage 2 412 414 10.15% 10.24% Stage 3 1,610 1,760 45.40% 47.32% Net Assets 1,13,232 1,22,889 97.84% 97.86% Stage 1 1,07,649 1,17,303 93.02% 93.41% Stage 2 3,648 3,627 3.15% 2.89% Stage 3 1,936 1,959 1.67% 1.56% 26#27Chola Enter a better life Stagewise ECL Summary - Sep 23 murugappa Particulars Asset Total Provn Total NNPA Asset Provn NNPA Rs in Cr % Stage 1A (A) 1,17,589 505 1,17,084 93.64% 0.43% 93.24% Stage 1B (B) 229 11 218 0.18% 4.69% 0.17% Total Stage 1 (C) 1,17,818 516 1,17,303 93.82% 0.44% 93.41% Stage 2A (D) 2,872 269 2,603 2.29% 9.37% 2.07% Stage 2B (E) 1,169 145 1,024 0.93% 12.39% 0.82% Total Stage 2 (F) 4,041 414 3,627 3.22% 10.24% 2.89% Total Stage 3 (G) 3,719 1,760 1,959 2.96% 47.32% 1.56% Total (C + F + G) 1,25,578 2,689 1,22,889 100.00% 2.14% 97.86% NPA as per RBI (incl Sec) B + E + G) 5,117 1,915 3,202 4.07% 37.43% 2.55% NNPA%-RBI: Net NPA/(Asset - provisions for GNPA) 2.59% Addition of Stage 1B, Stage 2B and Stage 3 will be the GNPA% and NNPA % as per RBI norms with INDAS values. We carry additional provision of Rs.938 Cr under INDAS over IRAC Asset Classification: STAGE 1A STAGE 1B Represents assets (i) which had never touched NPA and (ii) which had been an NPA in the past but had been normalised and currently in the 0-30 days - Hence no more an NPA as per RBI norms Represents assets which had been an NPA in the past but yet to be fully normalised though it has moved to stage 1 currently - Hence an NPA as per current RBI norms STAGE 2A STAGE 2B Represents assets (i) which had never touched NPA and (ii) which had been an NPA in the past but had been normalised post that and now in 31-90 days DPD - Hence no more an NPA as per RBI norms Represents assets which had been an NPA in the past but yet to be fully normalised though it has moved to stage 2 currently - Hence an NPA as per current RBI norms STAGE 3 Represents assets which continues to be a NPA as on the closing date - Hence an NPA as per current RBI norms 27 22#28Chola Enter a better life Stage 3 Assets Product-wise murugappa Cr Closing Asset Class Asset Gross Stage 3 ECL Stage 3 Asset % Provision Coverage Stage 3 Stage 3% Provision Net Net Sep23 1,25,578 3,719 2.96% 1,760 47.32% 1,959 1.56% VF 77,169 2,563 3.32% 1,217 47.48% 1,346 1.74% LAP 24,270 817 3.37% 368 44.97% 450 1.85% HL 10,533 146 1.39% 53 36.44% 93 0.88% Others 13,607 193 1.42% 122 63.49% 70 0.52% Jun23 1,15,731 3,546 3.06% 1,610 45.40% 1,936 1.67% VF 72,657 2,432 3.35% 1,106 45.48% 1,326 1.83% LAP 22,345 854 3.82% 383 44.90% 470 2.10% HL 9,234 144 1.56% 52 36.09% 92 1.00% Others 11,495 116 1.01% 68 58.92% 48 0.41% As per revised RBI norms GNPA% & NNPA% as of Sep23 is at 4.07% and 2.59% respectively. 28#2912.00% Chola Enter a better life Chola Chola -Stage 3 Assets Trend murugappa 47.32% 50.00% 45.40% 46.00% 45.00% 41.48% 10.00% 40.69% 40.96% 39.67% 38.80% 40.00% 8.00% 5.85% 35.00% 6.00% 4.37% 4.16% 3.84% 2.27% 3.51% 30.00% 4.00% 3.01% 3.06% 2.96% 1.73% 1.69% 1.59% 1.44% 1.38% 1.39% 1.40% 2.00% 25.00% 3.58% 2.64% 2.47% 2.25% 2.07% 1.62% 1.67% 1.56% 0.00% 20.00% Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Net Stg 3 Asset % ECL Provn Gross Stage 3 Asset % Provn Covg As per revised RBI norms GNPA% & NNPA% as of Jun23 is at 4.07% and 2.59% respectively. 29#30Ww-hab m ΠΕΡΙ Business Overview s.a 8.A O.P BERK " " " ON Ev 00.25 000,02 000,2 at eee.ee of ad eee Ar eee ex 000,0 eee 000,2€ of 000,0 000,25 000.0 000,01 ad 000,2 of of до eee.e eee.ec eee.ec 900 AC eee,PI (ansllob) smcont 225 nort 000,2 90A 19blo 10 08 er-ar AT-OT Sa 22 20 оа 8S S 24 ea-za σε -ar 0 08 08 ST от 08 22 ог OA ar 20 30 w OS or#31Vehicle Finance#32Chola Enter a better life Vehicle Finance: Q2 FY24 & H1 FY24 Performance Disbursements Assets under management Loss and provisions • • murugappa Disbursements grew by 38% in Q2 FY24 to Rs. 11,731 Cr & by 35% in H1 FY24 to Rs. 23,032 Cr as compared to Q2 FY23 & H1 FY23 respectively. AUM has grown by 31% YoY. Loan losses dropped to 1.7% in Q2 FY24 from 1.8% in Q2 FY23 & to 1.6% in H1 FY24 from 1.9% in H1 FY23. Profit before tax PBT grew by 7% in Q2 FY24 to Rs.499 Cr & by 6% in H1 FY24 to Rs.1,000 Cr as compared to Q2 FY23 & H1 FY23 respectively. 32 32#33Chola Sector outlook Enter a better life Sector Outlook - Vehicle Finance business (1/3) * The Light commercial vehicle segment had a growth of 7% in Q2 FY'24 & 3% in H1 FY'24 with an all-time high sales in H1 of any previous year, The segment is expected to grow stronger in the coming months with festive demand. Chola's Position murugappa Increased demand for Light commercial vehicle will help us garner higher market share, we will continue our focus in this segment based on the upcoming harvest season and rural uptake. LIVES The Small commercial vehicle segment had a de- growth of 8% in Q2 FY'24 & 13% in H1 FY'24. The growth in this segment is expected to be muted. We will focus on this segment with a cautious approach to financing. BE approac BELL had a growth. Our exposure The Heavy commercial vehicle segment had a growth of 18% in Q2 FY'24 & 10% in H1 FY'24. The segment is expected to pickup growth in the coming quarters driven by replacement demand, increased mining, infrastructure and construction activities. Our exposure in this segment is 7% at a portfolio level. We are treading carefully in this segment due to increase in price and operating costs. 33#34Chola Sector outlook Enter a better life Sector Outlook - Vehicle Finance business (2/3) murugappa Chola's Position ☐ The Passenger vehicle (Car & MUV) segment had a growth of 5% in Q2 FY'24 and 7% in H1 FY'24 with an all-time high sales in H1 of any previous year. This segment is witnessing healthy demand. We will continue to focus in this segment in line with market demand especially in smaller towns and rural areas. Band 2 % in. The compar The Two-wheeler industry had a de-growth of 2% in Q2 FY'24 & a growth of 4% in H1 FY'24. This segment is expected to grow with the festive season coming in. The company intends to drive two-wheeler financing through quality underwriting and clear portfolio. BETTER NATION Used vehicle business has contributed to 33% of our disbursement volumes and this segment will continue to grow with the increased prices of new vehicles. We will continue to be a key financier in this segment with a watch on portfolio quality driven by focussed collection effort. 34#35Chola Sector outlook Enter a better life - Vehicle Finance business (3/3) murugappa Sector Outlook The Construction Equipment segment had a growth of 29% in Q2 FY'24 and 22% in H1 FY'24. This segment is aided by improvement in overall macroeconomic environment. BE Chola's Position Our exposure in this segment is around 7% at portfolio level. We follow a guarded approach to build a clean portfolio. LIVES The Tractor industry had a de-growth of 6% in Q2 FY'24 & 4% in H1 FY'24 due to a high base effect in the previous year. We expect this segment to have single digit growth this year due to uneven rainfall. We will keep a close watch on this segment considering the El-Nino phenomenon affecting kharif yields and cash flows. BE af NATION 35#36Chola Enter a better life Auto Industry Outlook Trend in Domestic LCV Sales Trend in Domestic SCV Sales Chola 4 year (in Units) CAGR 2% Chola 4 year CAGR 16% Chola YoY growth rate 9% Industry 4 year CAGR 17% 75254 77852 Q2 FY21 Q2 FY22 183522 murugappa Chola YoY growth rate -2% (in Units) 65744 Industry 4 year CAGR 7% Industry YoY growth rate -8% CAGR @ 5% 51512 47299 44065 Industry YoY growth rate 7% CAGR @ 10% 113953 121907 38446 Q2 FY23 Q2 FY24 Q2 FY'28 (E) B Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY24 Q2 FY'28 (E) Replacement demand, last-mile transport requirements and positive macroeconomic environment. Stronger demand from consumption driven sectors and E-commerce based companies. • Demand for Pickups to increase in the long term due to higher flexibility in usage over sub one tonne vehicles. • Bus Sales to be supported by growing urban population, demand from schools/ corporates and increased inter-city travel. Source: FY21 to FY28 numbers are from SIAM & CRISIL 36#37Chola Enter a better life Auto Industry Outlook Trend in Domestic HCV Sales murugappa Trend in Domestic Car & MUV Sales Chola 4 year CAGR 79% Chola YoY growth rate 9% (in Units) Industry 4 year CAGR 59% Industry YoY growth rate 18% Chola 4 year CAGR 29% Chola YoY growth rate 34% (in Units) 104543 1655479 CAGR @ 10% 76603 64913 V Industry 4 year CAGR 14% 42366 19127 B 726938 743410 Industry YoY growth 1027922 rate 5% CAGR @ 10% 1076397 Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY24 Q2 FY'28 (E) Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY24 Q2 FY'28 (E) Improved industrial activity, steady agricultural output and the government's focus on infrastructure will aid growth. Pick up in construction and mining activities over the long term would drive demand. Higher disposable income and introduction of newer models to aid long term demand. Increase in rural demand and growing penetration in tier III, tier IV towns will back stable growth. Source: FY21 to FY28 numbers are from SIAM & CRISIL 37#38High RISK Low Chola Enter a better life Vehicle Finance-Business Model & Positioning CV Industry Low Low Chola Position PV murugappa Industry Chola Position Low Principal Operator > 50 Vehicles Large Operators 26- 50 vehicles HCV Medium Operators 10-25-HCV & LCV vehicles SRTOS-HCV & LCV First Time Users & Small Ticket Operators, older vehicles HCV, LCV & SCV HCV : Heavy commercial vehicle, LCV: Light commercial vehicle, SCV Small commercial vehicle, SRTO: Small Road Transport Operators ~65% of disbursements are to micro & small enterprises and agri -based customer segment Chola positioning- Middle of the pyramid through New CVs, Used CVs High Top of the Bottom of the pyramid through SCV & older CVs Shubh -Returns BETTER Salaried BETT High Self Employed with Financials Taxi and Tour Operator Agri, Asset & Commercial, Used PV: Passenger Vehicle, MUV :Multi Utility Vehicle • • 66% of disbursements are to Chola Existing, Agri & Commercial usage customers ~ 34% disbursements are to Self Employed with financials Chola positioning- Middle of the pyramid is into Agri, Asset & Commercial High 38 Returns#39High -RISK- Low Chola Enter a better life Vehicle Finance-Business Model & Positioning Tractor Industry Low Low Chola Position Large Farmer Captive Users / Prior Vehicles Medium Farmers Small & Marginal Farmers First Time Buyers First Time Users / Tenant Farmer Tractors only. In exceptional cases considering implements like power tillers & combine harvesters ~65% of disbursements are to agri -based customer segment Application - Agri usage Commercial usage Agri and Commercial usage New & Used Returns CE BETTER LIVES BETT Super Strategic Strategic Customer Captive Users/Prior Vehicles Medium Retail operator Small Retail Operator First Time Buyers First Time Users High High Focus on Backhoe Loaders, Excavators and Cranes ~69% of disbursements are to retail customer segment Application - Captive Hiring New & Used murugappa Industry Low Chola Position High 39 Returns#40Chola Enter a better life Vehicle Finance - Disbursement/Portfolio Mix - Q2 FY24 murugappa Well diversified across geography -Disbursements - State wise -Portfolio - State wise Dadra and Nagar Haveli Dadar and & Daman and MP Diu AP Karnataka 0.04% Maharashtra Gujarat Nagar Haveli & Daman and BETTER MP Diu 0.04% AP Karnataka Maharashtra 5% Kerala 5% 7% Goa 10% WB 5% Puducherry 4% Gujarat 0.2% Telangana Goa 6% 5% Kerala 6% 11% 4% 0.2% 4% Puducherry Telangana 5% Arunachal 0.2% Pradesh 4% WEST SOUTH 20% 9% 30% WB 0.3% WEST 21% SOUTH 28% TN Odisha 0.03% Arunachal Pradesh 5% 8% TN EAST 1% Andaman & 4% 29% NORTH 3% Nicobar Island 0.02% 3% 21% ,1% 0.4% Jharkhand 0.5% Odisha Andaman & 0.004% Nicobar Island 5%0.02% EAST NORTH 1% 29% 22% 3% Delhi 3% 0.3%1% Haryana 1% Delhi 0.5% HP 1% Tripura 7% 7% Haryana HP 7% 7% Jharkhand J&K 0.1% 0.1% 0.1% 0.1% Chattisgarh 5% 7% J&K 4% 1% Tripura Chattisgarh 6% 7% Punjab 4% 1% Punjab Sikkim Bihar Sikkim Rajasthan Rajasthan Chandigarh Bihar Chandigarh Assam, Meghalaya, Uttarakhand UP Assam, Meghalaya, Mizoram UP Uttarakhand Mizoram 40 40#41Chola Enter a better life Vehicle Finance - Disbursement/Portfolio Mix - Q2 FY24 murugappa Well diversified product segments [Disbursements (%) - Product wise Portfolio (%) - Product wise MUV 10% CAR 12% HCV 3 Wheeler CE 5% 0.3% LCV 5% 16% 2 Wheeler Tractor MINI LCV 5% 3% 9% BETT HCV CE 7% ម៖ 3 Wheeler 1% 6% MUV Used Vehicles 9% 34% LCV 21% CAR 12% Tractor MINI LCV 8% 3% 2 Wheeler 6% Used Vehicles 27% 41#42High Yield Medium Low Yield Yield Chola Enter a better life Vehicle Finance - Disbursement Mix - Quarter-wise Disbursement (Cr) - Product wise -Disbursement (%) - Product wise murugappa 12,190 * 11,731 882 * 11,301 627 10,446 653 1,053 640 584 ៩៩ 7% 76 7% 6% 5% 5% 5% 5% 9% 687 19% 17% 17% 16% 560 1,860 18% * 8,502 2,211 1,936 468 1,816 1,134 9% 9% 9% 10% 479 1,077 1,062 9% 925 11% 11% 12% 12% 1,604 1,369 1,312 1,325 11% 1,158 293 3% 3% 2% 35 3% 5% 763 340 271 616 6% 7% 347 639 770 35 3% 7% 5% 951 772 295 497 3,930 31% 30% 32% 33% 3,632 3,579 30% 3,144 2,657 965 71 956 90 1,024 1,113 8% 9% 8% 9% 9% 96 97 148 1% 1% 1% 1% 1% Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 ■2 Wheeler ■CAR CE Used Vehicles Tractor MUV LCV *Total ■3 Wheeler ■CAR ■2 Wheeler MUV Used Vehicles LCV Tractor HCV MINI LCV CE 721 68 Q2 FY23 ■3 Wheeler MINI LCV ■HCV Q3 FY23 42 42#43Medium Yield Low Yield High Yield Chola Enter a better life Vehicle Finance - Portfolio Mix - Quarter-wise -Portfolio (Cr) - Product wise -Portfolio (%) - Product wise الها murugappa * 75,396 6% 7% 7% 7% 7% * 71,065 4,906 7% 7% 7% 7% 7% * 66,938 4,721 5,058 61,285 4,487 4,878 * 57,606 21% 21% 21% 21% 21% 3,990 4,742 15,583 3,666 4,126 14,814 4,015 14,032 8% 8% 9% 9% 9% 12,810 6,907 12,305 6,295 11% 12% 5,720 12% 12% 12% 5,090 9,077 4,588 8,444 4% 4% 4% 3% 3% 7,800 7,121 2,420 6,573 2,387 9% 9% 8% 8% 8% 2,373 5,856 2,281 5,775 2,199 5,630 5,513 5,319 15,584 16,494 17,833 18,954 20,252 27% 27% 27% 27% 27% 2,980 375 Q2 FY23 ■3 Wheeler ■MUV 3,469 391 Q3 FY23 ■2 Wheeler LCV HCV 3,895 426 4,334 463 4,788 548 5% 6% 6% 6% 6% 1% 1% 1% 1% 1% Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Used Vehicles Tractor MINI LCV CAR 3 Wheeler 2 Wheeler Used Vehicles Tractor MINI LCV CE *Total CAR ■MUV LCV HCV CE 43 13#44Chola Enter a better life Vehicle Finance - Disbursements and Asset Under Management -Disbursements (Cr) Assets under management (Cr). 32% 8,562 11,301 38% 8,502 11,731 35% 23,032 B28 28% *71,065 146 17,063 *55,376 547 murugappa 31% *75,396 97 *57,606 417 70,918 57,189 54,829 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 On Book Q2 FY23 75,299 Q2 FY24 Assignment * Total AUM 44#45Chola Enter a better life -Income (Cr) Vehicle Finance - Income and Profit before tax -Profit before tax (Cr)- 24% 2,013 26% 2,498 2,133 2,690 4,146 25% 5,187 BETTER VES Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 4% 7% 501 499 480 468 6% murugappa 1,000 948 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 45#46Chola Enter a better life Net Income Margin (%) Vehicle Finance - Asset Ratios Expense Ratio (%) 8.9% murugappa 8.7% 8.5% 3.3% 3.3% 3.3% 3.1% 7.6% 3.0% 7.4% 7.2% 2.8% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Loan Losses & Provisions (%) 2.1% 1.9% 1.8% 1.7% 1.6% 1.5% Q1 FY23 Q1 FY24 ROA - PBT (%)⋅ Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 3.6% 3.3% 2.9% 2.7% 3.4% 2.8% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 46#47Chola Enter a better life Profit and Loss Statement - Vehicle Finance (Managed) murugappa Cr Particulars Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 Growth % Q2-0-Q2 Growth % H1 FY23 H1 FY24 H1-o-H1 Disbursements 8,562 11,301 8,502 11,731 Closing Assets - Managed 55,376 Income 2,013 71,065 57,606 2,498 2,133 75,396 38% 17,063 31% 57,606 23,032 35% 75,396 31% 2,690 26% 4,146 5,187 25% Finance Charges 811 1,258 928 1,300 40% 1,739 2,558 47% Net Income 1,202 1,239 1,205 1,390 15% 2,407 2,629 9% Expenses 442 489 477 579 22% 919 1,068 16% Net Credit Losses 280 250 260 311 20% 540 561 4% PBT 480 501 468 499 7% 948 1,000 6% Asset Ratios Income 14.9% 14.6% 15.0% 14.6% 15.0% 14.6% Cost of Funds 6.0% 7.3% 6.5% 7.1% 6.3% 7.2% Net Income Margin 8.9% 7.2% 8.5% 7.6% 8.7% 7.4% Expense 3.3% 2.8% 3.3% 3.1% 3.3% 3.0% Losses & Provisions 2.1% 1.5% 1.8% 1.7% 1.9% 1.6% ROA-PBT 3.6% 2.9% 3.3% 2.7% 3.4% 2.8% Cost to Net Income 36.8% 39.4% 39.6% 41.7% 38.2% 40.6% 47#48Chola Enter a better life Profit and Loss Statement - Vehicle Finance (On Book) murugappa Cr Particulars Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 Growth % Q2-0-Q2 H1 FY23 H1 FY24 Growth % H1-o-H1 Disbursements Closing Assets (On B/S) Income 8,562 11,301 8,502 11,731 54,829 1,992 70,918 57,189 75,299 2,491 38% 17,063 23,032 32% 57,189 75,299 35% 32% Finance Charges 798 1,254 2,116 2,684 889 27% 4,108 5,175 26% 1,297 46% 1,687 2,551 51% Net Income 1,194 1,237 1,227 1,387 13% 2,421 2,624 8% Expenses 442 489 477 579 22% 919 1,068 16% Net Credit Losses 280 250 260 311 20% 540 561 4% PBT 472 499 490 496 1% 962 995 3% Asset Ratios Income 14.9% 14.6% 15.0% 14.6% 15.0% 14.6% Cost of Funds 6.0% 7.3% 6.3% 7.1% 6.1% 7.2% Net Income Margin 8.9% 7.2% 8.7% 7.5% 8.8% 7.4% Expense 3.3% 2.9% 3.4% 3.2% 3.3% 3.0% Losses & Provisions 2.1% 1.5% 1.8% 1.7% 2.0% 1.6% ROA-PBT 3.5% 2.9% 3.5% 2.7% 3.5% 2.8% Cost to Net Income 37.1% 39.5% 38.8% 41.8% 38.0% 40.7% 48#49Loan Against Property#50Chola Enter a better life Loan Against Property - Q2 FY24 & H1 FY24 Performance Disbursements Asset under management • • murugappa Disbursements grew by 42% in Q2 FY24 to Rs. 3,192 Cr & by 37% in H1FY24 to Rs. 5,872 Cr as compared to Q2 FY23 & H1 FY23 respectively. AUM has grown by 31% YoY. Loss and provisions Loan losses dropped to -0.10% in Q2 FY24 from -0.01% in Q2 FY23 & to -0.11% in H1 FY24 from -0.05% in H1 FY23. Profit before tax PBT grew by 32% in Q2 FY24 to Rs.234 Cr & by 21% in H1 FY24 to Rs.458 Cr as compared to Q2 FY23 & H1 FY23 respectively. 50 50#51• • Chola Enter a better life Loan Against Property: Industry outlook Sector Outlook CRISIL estimates the LAP segment to experience growth at a rate of 10-12% for FY24, on back of favorable economic conditions and gradual restoration of business activities to pre-pandemic levels. This anticipated acceleration is attributed to the overall economy recovery and a more stable business environment Chola's Position murugappa • Chola's LAP team is currently focusing on increasing its market share backed by consistent disbursement growth and collections performance. Our focus continues to be on retail customers especially in smaller towns and rural areas B co LIVES Ind-Ra believes NBFCs will have to judiciously manage margins in FY24, given the elevated borrowing cost and limited flexibility in passing over rate hikes in the secured lending segments due to the competition from banks and factoring in borrowers' repayment ability Ind-Ra believes the sector could witness a marginal rise in the gross stage 3 assets, largely due to inflationary pressures impacting borrower cashflows and the recent slowdown in wage growth. • LAP team is capitalizing on Chola's pan India geographical presence by going wide in tier 3 and tier 4 markets to improve margins, while continuing to hold market leadership position in tier 1 and tier 2 markets ON . Chola LAP team has strengthened collection & legal process and the asset quality has shown steady improvement. The stage 3 book has come down with consistent improvement in collection efficiency Source: https://www.indiaratings.co.in/pressrelease/66343, CRISIL - NBFC Research Report - Nov 2022 51#52Chola Enter a better life murugappa Loan Against Property - Disbursements and Asset Under Management -Disbursements (Cr)- Assets under Management (*Cr) 32% 2,036 2,679 42% 2,246 3,192 37% 5,872 4,282 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 BE 29% * 22,866 * 17,675 1,418 1,030 16,257 * 18,843 1,318 31% * 24,721 950 23,771 21,836 17,525 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 ■On Book Assigned * Total AUM 52 52#53Chola Enter a better life Loan Against Property - Income and Profit before tax -Income (Cr)- -Profit before tax (Cr)- murugappa 503 40% 704 40% 757 1,043 40% 1,460 ail 540 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 BETTER VES 200 12% 224 178 32% 234 378 21% 458 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 53#54Chola Enter a better life Net Income Margin (%) Loan Against Property - Asset Ratios Expenses Ratio (%) 1.8% 5.7% 5.6% 5.5% 5.5% 5.4% 5.3% 1.2% 1.4% 1.4% 1.3% murugappa 1.6% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 -Loan Losses & Provisions (%) -ROA - PBT (%) Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 4.7% NAT 4.2% 4.0% 3.9% 3.9% 4.0% -0.1% -0.1% -0.01% -0.1% -0.05% -0.1% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 54#55Chola Enter a better life murugappa Profit and Loss Statement - Loan Against Property (Managed) Cr Particulars Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 Growth % Q2-0-Q2 Growth % H1 FY23 H1 FY24 H1-o-H1 Disbursements 2,036 2,679 2,246 3,192 Closing Assets - Managed 17,675 22,866 18,843 24,721 42% 4,282 31% 18,843 5,872 37% 24,721 31% Income 503 704 540 757 40% 1,043 1,460 40% Finance Charges 257 408 298 422 42% 555 829 50% Net Income 246 296 242 335 39% 488 631 29% Expenses 49 80 65 106 65% 114 186 63% Net Credit Losses -4 -7 -1 -6 1025% -4 -13 217% PBT 200 224 178 234 32% 378 458 21% Asset Ratios Income 11.7% 12.7% 11.7% 12.7% 11.7% 12.7% Cost of Funds 6.0% 7.4% 6.5% 7.1% 6.2% 7.2% Net Income Margin 5.7% 5.4% 5.3% 5.6% 5.5% 5.5% Expense 1.2% 1.4% 1.4% 1.8% 1.3% 1.6% Losses & Provisions -0.1% -0.1% 0.0% -0.1% 0.0% -0.1% ROA-PBT 4.7% 4.0% 3.9% 3.9% 4.2% 4.0% Cost to Net Income 20.1% 26.9% 26.7% 31.8% 23.4% 29.5% 55#56Chola Enter a better life murugappa Profit and Loss Statement - Loan Against Property (On Book) Cr Particulars Q1 FY23 Q1 FY24 Q2 FY23 Q2FY24 Growth % Q2-0-Q2 H1 FY23 H1 FY24 Growth % H1-o-H1 Disbursements 2,036 Closing Assets (On B/S) 16,257 2,679 2,246 3,192 21,836 17,525 23,771 42% 4,282 5,872 36% 17,525 23,771 37% 36% Income 453 672 497 715 44% 950 1,387 46% Finance Charges 227 384 249 399 60% 476 783 65% Net Income 226 288 248 317 28% 474 604 28% Expenses 49 80 65 106 65% 114 186 63% Net Credit Losses -4 -7 (1) -6 1025% (4) -13 217% PBT 180 215 184 216 18% 364 431 18% Asset Ratios Income 11.5% 12.8% 11.7% 12.5% 11.6% 12.6% Cost of Funds 5.8% 7.3% 5.8% 7.0% 5.8% 7.1% Net Income Margin 5.8% 5.5% 5.8% 5.5% 5.8% 5.5% Expense 1.3% 1.5% 1.5% 1.9% 1.4% 1.7% Losses & Provisions -0.1% -0.1% -0.01% -0.10% -0.05% -0.1% ROA-PBT Cost to Net Income 4.6% 21.9% 4.1% 4.3% 27.7% 26.1% 3.8% 33.6% 4.4% 24.1% 3.9% 30.8% 56#57Home Loans#58Chola Enter a better life Home Loans - Q2 FY24 & H1 FY24 Performance Disbursements Asset under management Loss and provisions Profit before tax murugappa • Disbursements grew by 112% in Q2 FY24 to Rs. 1,575 Cr & by 124% in H1FY24 to Rs. 3,029 Cr as compared to Q2 FY23 & H1 FY23 respectively. • Note: Home Loans includes Affordable LAP AUM have grown by 67% YoY. Loan losses dropped to 0.4% in Q2 FY24 from 0.5% in Q2 FY23 & to 0.2% in H1 FY24 from 0.4% in H1 FY23. PBT grew by 30% in Q2 FY24 to Rs.96 Cr & by 15% in H1 FY24 to Rs.183 Cr as compared to Q2 FY23 & H1 FY23 respectively. 58#59Chola Home Loans - Industry outlook Enter a better life murugappa Sector Outlook The overall growth in HFCS is expected to remain at 12-14% in FY24 • GNPAs of AHFCS are likely to continue to be between 2.3% 2.5% % in FY24 - Chola's Position Chola continues to consolidate its position across branches pan-India while also targeting expansion in newer underpenetrated geographies newer Chola cont Chola continues to pursue legal recovery for the higher bucket portfolio & is also continuously improving collections efficiencies through advanced analytics & digital-led collections tions, cost of. Chola conti Given current macro economic conditions, cost of funds is expected to remain at elevated levels. Growth related costs are also expected to drive operating expenses for the AHFCs. continues Chola continues to pursue profitable growth through low-cost expansion, process optimizations, & elimination of inefficiencies across all functions to ensure margins are sustained 59#60Chola Enter a better life Home Loans - Disbursements and Asset Under Management -Disbursements (Cr)- Assets under Management (*Cr) 138% 611 1,454 112% 743 1,575 124% 3,029 BETTER 60% *9,528 413 *5,938 500 1,354 9,115 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 5,438 67% *6,454 478 5,976 murugappa *10,801 392 10,409 Q1 FY23 Q1 FY24 On Book Assigned * Total AUM Q2 FY23 Q2 FY24 60 60#61Chola Enter a better life -Income (Cr)- Home Loans - Income and Profit before tax -Profit before tax (Cr)- 68% 344 79% 398 204 222 68% 742 BETTER VES 3% 30% 426 TER 85 87 74 96 158 murugappa 15% 183 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 61#62Chola Enter a better life Net Income Margin (%) Home Loans - Asset Ratios Expenses Ratio (%) 8.4% 8.2% 8.1% 7.7% 7.9% 7.9% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 -Loan Losses & Provisions (%) 0.4% -0.1% 0.5% 0.4% 0.4% 0.2% 3.9% murugappa 4.0% 4.0% 2.7% 2.4% 2.1% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 -ROA - PBT (%) 5.9% N 5.3% 4.7% 3.9% 3.7% 3.8% Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 62#63Chola Enter a better life Profit and Loss Statement - Home Loans (Managed) murugappa Cr Growth % Particulars Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 Growth % Q2-o-Q2 H1 FY23 H1 FY24 H1-o-H1 Disbursements 611 1,454 743 1,575 112% 1,354 3,029 124% Closing Assets - Managed 5,938 9,528 6,454 10,801 67% 6,454 10,801 67% Income 204 344 222 398 79% 426 742 74% Finance Charges 84 171 99 190 91% 183 361 97% Net Income 120 173 123 208 70% 243 381 57% Expenses 30 88 42 102 145% 72 190 163% Net Credit Losses 5 -2 7 10 41% 13 9 -33% PBT 85 87 74 96 30% 158 183 15% Asset Ratios Income 14.2% 15.4% 14.2% 15.6% 14.2% 15.5% Cost of Funds 5.9% 7.7% 6.3% 7.4% 6.1% 7.5% Net Income Margin 8.4% 7.7% 7.9% 8.2% 8.1% 7.9% Expense 2.1% 3.9% 2.7% 4.0% 2.4% 4.0% Losses & Provisions 0.4% -0.1% 0.5% 0.4% 0.4% 0.2% ROA-PBT 5.9% 3.9% 4.7% 3.7% 5.3% 3.8% Cost to Net Income 25.2% 50.8% 34.1% 49.1% 29.7% 49.8% 63#64Chola Enter a better life Profit and Loss Statement - Home Loans (On Book) murugappa Cr Particulars Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 Growth % Q2-o-Q2 H1 FY23 H1 FY24 Growth % H1-o-H1 Disbursements 611 1,454 743 1,575 112% 1,354 3,029 124% Closing Assets (On B/S) 5,438 9,115 5,976 10,409 74% 5,976 10,409 74% Income 185 331 205 383 87% 390 714 83% Finance Charges 74 162 85 181 112% 159 343 115% Net Income 111 169 120 202 69% 231 371 61% Expenses 30 88 42 102 145% 72 190 163% Net Credit Losses 5 (2) 7 10 41% 13 9 -33% PBT 75 83 71 90 27% 146 173 19% Asset Ratios Income 14.1% 15.6% 14.3% 15.6% 14.2% 15.6% Cost of Funds 5.7% 7.6% 5.9% 7.4% 5.8% 7.5% Net Income Margin 8.5% 7.9% 8.3% 8.3% 8.4% 8.1% Expense 2.3% 4.1% 2.9% 4.2% 2.6% 4.1% Losses & Provisions 0.4% -0.1% 0.5% 0.4% 0.5% 0.2% ROA-PBT 5.7% 3.9% 4.9% 3.7% 5.3% 3.8% Cost to Net Income 27.4% 51.9% 34.8% 50.5% 31.3% 51.1% 64#65Funding Profile 6#66Chola Enter a better life Diversified Borrowings Profile (I/II) Borrowing mix by instrument type murugappa * 79,321 * 89,305 * 97,356 4% 6% 4% 2% 3% 3% * $1,08,140 * 1,19,470 6% 3% 7% 7% 3% 9% 10% 5% 2% 15% 16% 4% 4% 4% 4% 3% 18% 4% 2% 5% 18% 16% 15% 14% 58% 52% 54% 49% 49% 5% Q2 FY23 4% Q3 FY23 Tier II Capital Bank Term loans Debentures ■FII FCNR 5% Q4 FY23 5% Q1 FY24 4% Q2 FY24 (Cr) Securitisation CC/WCDL Commercial Papers / ICD *Total Borrowings 66#67Chola Enter a better life Diversified Borrowings Profile (I/II) * 79,321 7% 3% 1%4% Borrowing mix by investor type * 89,305 9% 1% 3% * 97,356 * 1,08,140 10% 3% ET 15% 3% 1%3% 1% 3% 3% E 66% 64% 65% murugappa * 1,19,470 16% 3% 0.4% 2% 61% 60% (Cr) 1% 5% 5% 1% 5% 6% 6% 9% 10% 8% 7% 8% 3% 3% 3% 3% 3% Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Trusts Mutual Fund Insurance Company Individuals & HUF Banks - BANK OVERSEAS FII, FPI, NRI & NRN Corporates Securitisation *Total Borrowings 67#68Chola Enter a better life ALM Statement as of 30th Sep 2023 (As per IND AS) murugappa (Cr) ALM snapshot as on 30th Sep 2023 Particulars 1 m >1 to 2m Cash & Bank Balances 6,843.82 472.69 2,210.54 >2 to 3m >3 to 6m 3.10 >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 yr 707.40 600.00 196.18 Advances 4,140.98 3,942.35 3,440.65 11,157.62 18,522.61 50,402.97 14,730.67 Total 11,033.73 18,430.29 1,24,768.13 Trade Receivable & Others 163.05 126.54 9.17 28.12 Total Inflows (A) 11,147.85 4,541.59 5,660.35 Cumulative Total Inflows (B) Borrowin Repayment-Bank & Others Borrowin Repayment- Market 11,188.84 11,147.85 15,689.43 21,349.78 32,538.62 4,588.31 1,874.47 3,852.37 7,300.16 2,843.44 2,562.01 1,765.22 2,498.70 169.12 1,284.04 19,399.13 52,287.01 16,093.54 51,937.76 1,04,224.76 1,20,318.30 13,937.06 43,249.59 13,871.48 5,046.19 8,803.72 3,692.90 1,166.69 2,011.57 4,958.31 20,441.86 1,40,760.16 1,40,760.16 Capital Reserves and Surplus Other Outflows Total Outflows (C) 2,300.68 104.20 9,732.42 4,540.68 Cumulative Total Outflows (D) 9,732.42 14,273.10 E. GAP (A-C) 1,415.43 0.91 F.Cumulative GAP (B-D) 1,415.43 1,416.33 42.42 225.42 5,660.01 10,024.28 19,933.11 29,957.39 0.34 1,164.56 1,416.68 415.71 223.44 19,398.97 52,276.75 49,356.35 1,01,633.10 0.16 10.26 344.31 89,017.76 2,988.94 30,201.12 16,024.06 16,024.06 125.61 2,079.76 5,517.23 17,689.99 21,437.07 1,40,760.16 1,19,323.10 | 1,40,760.16 (1,596.45) (995.21) 2,581.24 Cumulative GAP as % (F/D) 14.54% 9.92% 7.11% 8.62% 2,581.40 5.23% 2,591.66 995.21 0.00 2.55% 0.83% 0.00% 68#69Chola Enter a better life CAR and Credit Rating Capital Adequacy Ratio (CAR) - As per RBI guideline 19.07 3.93 19.62 3.13 murugappa Tier I Tier II 17.13 17.44 16.62 2.35 2.30 1.96 15.14 16.49 14.78 15.14 14.66 FY21 FY22 FY23 Q1 FY24 Q2 FY24 Minimum CAR Stipulated by RBI is 15% & for Tier I is 10% Launched a composite QIP issue of equity shares (Rs 2,000 crores) and compulsorily convertible debentures (Rs 2,000 crores), overall aggregating to Rs 4,000 crores and the allotment was done on October 5th 2023. Post the Capital raise, the Capital Adequacy ratio will be more than 20% and Tier I will be more than 16.5%. India ratings Loan type Care ST CP/WCDL Credit Rating LT NCD/CC ICRA [ICRA] A1+ Crisil [CRISIL] A1+ IND AA + (ind) stable CARE AA+/Stable NCD (Public Issue) IND AA+/ Stable Tier II SD IND AA+/Stable Tier I PDI IND AA/ Stable CARE AA+/Stable CARE AA /Stable [ICRA] AA+/Stable [ICRA] AA+/Stable [ICRA] AA+/Stable [ICRA] AA/Stable 69#70Consolidated Financials#71Chola Enter a better life Consolidated Profit & Loss murugappa (Cr) Growth % Growth % Particulars Q1 FY23 Q1 FY24 Q2 FY23 Q2 FY24 H1 FY23 H1 FY24 Q2-0-Q2 H1-o-H1 Income 2,796 4,171 3,067 4,695 53% 5,863 8,866 51% Expenses 2,032 3,215 2,305 3,630 57% 4,337 6,845 58% PBT 764 956 762 1,065 40% 1,526 2,021 32% PAT 562 710 563 773 37% 1,125 1,483 32% Note: Above financials includes Chola Sec, Chola Home Finance, Paytail and Payswiff. 71 14#72ENVIROMENT Environmental Social Governance GOVERNANCE ESG#73Chola Enter a better life Consecutively awarded for last 4 years........ FTSE Russell CERTIFICATE OF MEMBERSHIP This is to certify that Cholamandalam Investment and Finance is a constituent company in the FTSE4Good Index Series FTSE4Good June 2023 The FTSE 4Good Index Series is designed to identity companies that demonstrate strong environmental, social and governance practices measured against globally recognised standards 920 murugappa FY21 BE • FTSE Russell - Included in FTSE4 Good Index series FY22 • FTSE Russell - Reaffirmed as constituent of FTSE4Good Index Series in June 2021. BET FY 23 { • FTSE Russell - Reaffirmed as constituent of FTSE4Good Index Series in June 2022. • CRISIL ESG rating - STRONG FY 24 • FTSE Russell - Reaffirmed as constituent of FTSE4Good Index Series in June 2023. Note: For more on ESG refer our website - https://www.cholamandalam.com/esg-presentation.aspx 73#74Risk Management#75Chola Enter a better life Risk Governance Structure ■ Oversee the entire risk management process Board of Directors murugappa Risk Management Committee Executive Director Chief Risk Officer Risk Champions of Businesses/functions BET ■ Formed in 2007-08 ■ Meet four times in a year ■ Periodic review of framework, process, key risk movement and other initiatives ■ Review the risk management process BETTE Risk Management Division ■ Establish framework, tools & techniques ■ Create risk awareness ■ Works with Business/Functional head and Risk Champions of respective functions to identify, assess, mitigate, monitor and report key risks 75#76Chola Enter a better life Key Functions of Risk Management Division murugappa • Identify key risks in each function/business ccurrence and the • . Assess the risks in terms of probability of occurrence and their impact Identify mitigation/ risk controls put in place by respective process champions Identify key risk indicators to measure and monitor residual risk. Breach in key risks against thresholds are highlighted to risk champions to take appropriate mitigation strategies monitors the • For each function/business, the Risk Index monitors the level and direction of risk. Composite Risk Index tracks the level and direction of risks at an enterprise level. 76 76#77Chola • Enter a better life ERM as Value Centre in Business Processes ERM works with business teams on the overall customer life cycle management Active portfolio . Identifying segments & channels risk profiles management and prioritization for collection efforts murugappa Underwriting models to optimally onboard risk and price appropriately BETTER ON Customer retention strategies ERM team actively engages with the product teams for assessing risk reward trade-offs and other initiatives 77#78• • • . Chola Enter a better life ERM as Value Centre in Corporate Processes murugappa Periodic engagement with internal audit team to incorporate key observations on process failures identified by IA team which will be considered as part of risk review process. ERM also gives risk-based inputs to internal audit team to plan and prioritize their audits VES as inputs to Asse Actively participates and provides inputs to Asset Liability support group which monitors company's liquidity position BETTER Actively involved in risk assessment of IT and Cyber Security and its mitigation strategies Developing a framework for ESG implementation in the organization Develop and manage business continuity plan for all critical corporate functions across the organization 78#79Information Technology#80Chola Enter a better life Technology Infrastructure Provide resilient & scalable environment Technology Updates ⚫Optimize deployment architecture and rollout of scalable hybrid cloud solutions • Execute network infrastructure transition for secure access to diverse workloads across locations • Establish FinOps for optimal infrastructure utilization along with improved performance management Augmented asset and service management solution to handle all lifecycle events of technology assets Security & Governance Embed cyber security & technology governance • Continuous engagement Cyber Security domain teams for ongoing assessment across IT environment • Increase cyber security and data handling awareness across organization's employee and customer base • Establish and Improve cadence for governance and review of third-party partners & tech service providers • Sustain clear electronic asset disposal policy and appropriate handling of e-waste murugappa Digital Engagement & Application Platform Deliver seamless digital experience for all • Open market rollout of direct to customer digital App with 100% digital personal loan disbursement & online servicing • Consolidation of core Loan Management System platform for the SME business Design and deploy enhanced functional capabilities in Originations solution for Home Loan business • Increase RPA penetration for processes across reconciliation, payments, & payouts in the Finance & Operations functions. People & Innovation Drive innovation & build new capabilities • Ensure compliance with RBI master directions - technology systems, CBS / CFSS initiatives, and outsourcing Improve employee engagement & paperless processes via collaboration tools, digital metrics, and automated reports Deploy enhanced bots and engagement of customers using online, voice, WhatsApp, and marketing automation channels • Competency based skill development for improved future readiness within Digital Technology function 80 80#81Chola Enter a better life Contact us Our registered office Email-ID Cholamandalam Investment and Finance Company Limited (Chola), Chola Crest, C54-55 & Super B-4, Thiru-Vi-Ka Industrial Estate, Guindy, Chennai - 600032. Toll free number: 1800-200-4565 (9 AM to 7 PM) Land Line: 044-4090 7172 http://www.cholamandalam.com BETTER Sujatha P-Executive Vice President & Company Secretary - [email protected] Arulselvan D- President & CFO - [email protected] murugappa 81#82Chola Enter a better life murugappa • • • Disclaimer Certain 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 Investment and Finance Company Ltd and its subsidiaries. There can be no assurance that future developments affecting Cholamandalam Investment and Finance Company Ltd 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 Investment and Finance Company Ltd does not intend and is under no obligation, to update any particular forward- looking statement included in this presentation. The facts and figures mentioned in this presentation is for informational purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell securities of the Company, or the solicitation of any bid from you or any investor or an offer to subscribe for or purchase securities of the Company, and nothing contained herein shall form the basis of or be relied on in connection with any contract or commitment whatsoever. Nothing in the foregoing shall constitute and/or deem to constitute an offer or an invitation to an offer, to be made to the Indian public or any section thereof or any other jurisdiction through this presentation, and this presentation and its contents should not be construed to be a prospectus in India or elsewhere. This document has not been and will not be reviewed or approved by any statutory or regulatory authority in India or any other jurisdiction or by any stock exchanges in India or elsewhere. This document and the contents hereof are restricted for only the intended recipient (s). This document and the contents hereof should not be (i) forwarded or delivered or transmitted in any manner whatsoever, to any other person other than the intended recipient (s); or (ii) reproduced in any manner whatsoever. Any forwarding, distribution or reproduction of this document in whole or in part is unauthorised. The information in this document is being provided by the Company and is subject to change without notice. The information in this presentation has not been independently verified. No representation or warranty, express or implied, is made to the accuracy, completeness or fairness of the presentation and the information contained herein and no reliance should be placed on such information. The Company or any other parties whose names appear herein shall not be liable for any statements made herein or any event or circumstance arising therefrom. 82#83Chola Enter a better life THANK YOU murugappa Chola Crest, C54-55 & Super B-4, Thiru-Vi-Ka Industrial Estate, Guindy, Chennai - 600032. | Tel.: 044 4090 7172 | Fax: 044 4090 6464 | Email: [email protected] | Website: www.cholamandalam.com Cholamandalam Investment and Finance Company Limited