Sundaram Finance Ltd share Price Today

Sundaram Finance (SFL) is a Chennai-based financial group with a presence in auto finance, home finance, asset management and general insurance.

• Major value is derived from its vehicle financing business with AUM of ₹ 30,552 crore as of June 2022
• SFL has 632 branches with a substantial presence (~51%) in southern India

Sundaram Finance reported a mixed performance.

• Disbursements grew ~2.3x YoY and 31% QoQ at ₹ 4895 crore
• Core NII up 2.9% YoY but down 0.4% QoQ, NIMs down 21 bps QoQ at 5.3%, C/I higher at 35%
• Decline in provision led to 17.8% YoY PAT growth at ₹ 225 crore (-24.5% QoQ)
• Stage-3 assets increased 32 bps QoQ to 2.51%

Non-banking financial company Sundaram Finance announced Q4FY24 & FY24 results:

Standalone Financial Highlights:

• Disbursements for FY24 recorded a growth of 25% to Rs 26,163 crore as compared to Rs 20,966 crore registered in FY23. Disbursements for Q4FY24 recorded a growth of 18% to Rs 6,209 crore as compared to Rs 5,259 crore in Q4FY23.
• The assets under management grew by 27% to Rs 43,987 crore as of March 31, 2024, and against Rs 34,552 crore as of March 31, 2023.
• Net interest income rose 17% in FY24 as compared to FY23. For the quarter ending March 31, 2024, net interest income rose 21% over the corresponding quarter in FY23.
• The total restructured assets under Covid relief measures enabled by the Reserve Bank of India were at Rs 260 crore, about 0.6% of loan outstanding, as on March 31, 2024.
• Gross stage 3 as on March 31, 2024 stood at 1.26% with 50% provision cover as against 1.66% with provision cover of 49% as on March 31, 2023. Net stage 3 as on March 31, 2024 closed at 0.63% as against 0.86% as on March 31, 2023.
• The Gross and Net NPA, as per RBI’s new asset classification norms for NBFCs, are 1.98% and 1.25% respectively as against 3.00% and 2.10% as of March 31, 2023.
• Cost to income ratio closed at 34.69% in FY24 as against 34.26% in FY23. Cost to income ratio for Q4FY24 closed at 33.46% as against 33.02% for Q4FY23.
• Profit after tax registered a 23% rise in FY24, with net profit at Rs 1,334 crore (excluding exceptional item). The company had registered a net profit of Rs 1,088 crore in FY23. Profit after tax registered a 22% increase in Q4FY24 (excluding exceptional item), with net profit at Rs 386 crore as compared to Rs 316 crore in Q4FY23.
• During the year, the Company transferred 79,73,529 equity shares of Rs 5/- each held in Sundaram Finance Holdings Limited (SFHL), representing 3.59% stake, resulting in a profit of Rs 134 crore. SFHL has ceased to be a subsidiary of the company. The Company has decided to recognise this investment at Fair Value through Other Comprehensive Income as per IND AS 109. Provision of Rs 70 crore was made in respect of investments in Alternate Investment Funds (AIF) pursuant to RBI circular dated 27th March 2024.
• Return on assets (ROA) for FY24 closed at 3.18% as against 2.84% for FY23. Return on equity (ROE) was at 17.5% for FY24 as against 14.9% for FY23.
• Capital Adequacy Ratio stood at 20.5% (Tier I –16.8%) as of March 31, 2024 compared to 22.8% (Tier I – 17.7%) as of March 31, 2023.
• The Company has declared a final dividend of Rs 16/- per share (160%).

Consolidated Financial Highlights:

• The assets under management (AUM) in our lending and general insurance businesses stood at Rs 66,472 crore as on March 31, 2024 as against Rs 53,406 crore as on March 31, 2023. The assets under management of our asset management business stood at Rs 70,883 crore as on March 31, 2024 as against Rs 54,719 crore as on March 31, 2023.
• Profit after tax for FY24 grew by 8% to Rs 1,436 crore as compared to Rs 1,328 crore in FY23.

Harsha Viji, Executive Vice Chairman of the company said, “Team Sundaram has delivered a strong FY24 despite lower-than-expected economic activity in the quarter. Assets under management grew by 27% to a new high of Rs 43,987 crore, net stage 3 assets closed at 0.63% and profit after tax recorded a 23% growth to Rs 1,334 crore (excluding exceptional item) over the prior year period. Our Group companies in asset management, general insurance and home finance have continued their trajectory from FY23 and recorded strong results. We continue to rely on our time-tested approach of steady and sustainable growth with best-in class asset quality and consistent profitability.

Disbursements for FY24 recorded a growth of 25% over FY23 with all asset classes and geographies witnessing significant growth. Gross stage 3 assets improved substantially over the previous year. Gross stage 3 assets as on March 31, 2024, stood at 1.26% with provision cover of 50% as against 1.66% as on March 31, 2023, with provision cover of 49%. Profit after tax at Rs 1,334 crore registered an increase of 23% (excluding exceptional item) in FY24 as against Rs 1,088 crore in FY23. Return on assets at 3.18% as against 2.84% for FY23 and capital adequacy at 20.5% remains quite comfortable to support planned growth."

Rajiv Lochan, Managing Director of the company said, “Q4 witnessed sluggish demand in the automotive sector although pre-election impetus boosted infrastructure and construction activity. We improved market share and ensured best-in-class asset quality in a tough operating environment. Looking ahead, while medium term prospects for the Indian economy look promising, we expect FY25 to be a tale of two halves - H1 impacted by the general elections currently underway and normal monsoons forecasted and H2 witnessing a revival in demand and private investment. Team Sundaram will continue to take a through-cycle view and sharply focus on delivering the Sundaram experience to our customers, our people and all stakeholders,”

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