Cholamandalam Financial Holdings LimitedFinancial ServicesCHOLAHLDNG
Q1 FY27 earnings callCholamandalam Financial Holdings Limited
Quarter results were impacted by intense pricing competition in commercial lines and health, elevated motor OD claims, and a large fire loss, leading to a combined ratio of 120.4%.
Numbers
| Metric | This quarter | Change | Five-quarter trend |
|---|---|---|---|
| Gross Direct Premium Income (GDPI) | Rs. 1,860 crores | 2.6% | |
| Gross Written Premium (GWP) | Rs. 2,130 crores | 6.7% | |
| Net Earned Premium | Rs. 1,671 crore | — | |
| Claims Ratio | 85.6% | — | |
| Combined Ratio | 120.4% | — | |
| Operating Profit | Rs.71 crore | — | |
| Profit Before Tax | Rs.116 crore | — | |
| Investment Income | Rs.380 crore | — |
Financials
| Quarter | Revenue | Net profit (PAT) | Basic EPS |
|---|---|---|---|
| Q3 FY25 | ₹8,489.09 Cr+24.9% YoY+4.9% QoQ | ₹1,092.90 Cr+6.4% YoY-2.9% QoQ | ₹25.89+4.1% YoY-7.5% QoQ |
| Q2 FY25 | ₹8,090.16 Cr+28.4% YoY+6% QoQ | ₹1,125.24 Cr+26.7% YoY-3% QoQ | ₹27.99+24.9% YoY-4.1% QoQ |
| Q1 FY25 | ₹7,632.71 Cr+35.7% YoY+7.8% QoQ | ₹1,159.56 Cr+46.4% YoY+1.4% QoQ | ₹29.20+47.6% YoY+6.9% QoQ |
| Q4 FY24 | ₹7,083.48 Cr+36.6% YoY+4.3% QoQ | ₹1,143.75 Cr+27% YoY+11.4% QoQ | ₹27.32+25.8% YoY+9.8% QoQ |
| Q3 FY24 | ₹6,794.67 Cr+43.8% YoY+7.9% QoQ | ₹1,027.00 Cr+42.6% YoY+15.6% QoQ | ₹24.88+40.6% YoY+11% QoQ |
TL;DR
- Gross direct premium income (GDPI) grew 2.6% year-on-year to Rs. 1,860 crores.
- Motor OD loss ratio is elevated at over 86%, with management targeting to bring it below 80%.
- Combined ratio deteriorated to 120.4% due to higher motor reserve strengthening and a large fire loss.
- Health portfolio declined as the company prioritized portfolio quality and profitability over volume.
- Solvency ratio remains robust at 1.93 times.
Said on the call
“For a business line, Sanketh, which is 70% of our book, we cannot let this continue.”
From the Q&A
| Topic | What management said |
|---|---|
| Motor OD Loss Ratio | Management stated the current level of over 86% is not acceptable, and corrective actions aim to bring it down to start with a '7', ideally in the high-70s, and eventually to the mid-70s. |
| Supreme Court Judgment on Homemaker Claims | The company has not taken any provision as the matter is sub judice; claims are being evaluated on individual merits, and the industry awaits the outcome of a review petition. |
| Health Portfolio Decline | The decline in health is due to pricing corrections in the PSU bank group platform business and a strategy to prioritize portfolio quality and profitability, including migrating some business to a retail platform. |
| Commercial Lines and Reinsurance | Better reinsurance capacity helped limit the fire segment decline to 15.5% vs. an industry-wide 28% drop; the company expects pricing discipline to improve after recent NATCAT events, though a major fire loss of Rs.12.4 Crores impacted the quarter. |
| Impact of GIFT City on Reinsurance | Excess reinsurance capacity from GIFT City has contributed to a soft market, but its sustainability depends on reinsurers achieving acceptable returns; many players there lack the capacity to provide large lead lines. |
| Ind AS/IFRS Implementation | The company has a one-year forbearance and will implement the new framework from April 1, 2027; the financial impact is still being assessed and is not yet quantifiable. |
Guidance
- Benefits of corrective measures on motor OD are expected to become more visible over coming quarters, aiming to bring loss ratio down to start with a '7'.
- Expect greater pricing discipline in property insurance over coming quarters following NATCAT events in June.
- Commercial lines will continue to be a key focus area, with growth through calibrated participation and expanding presence in segments like liability, credit, and cyber.
Source
Summary written from the transcript filed by Cholamandalam Financial Holdings Limited for the call held on 14 Aug 2026; published 20 Aug 2026, 23:20 IST.