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Informist, Monday, May 26, 2025

By Sourabh Kumar

MUMBAI – Sundaram Finance Ltd.'s profit after tax grew nearly 8% on year but jumped around 56% on quarter, beating estimates of net profit from all the three brokerages tracking the non-banking finance company. Sundaram Finance's net profit rose due to robust growth in its other income. After the earnings, shares of Sundaram Finance were 1.2% higher at INR 5,340.00 at 1459 IST on the National Stock Exchange. The shares eventually closed at INR 5,351.00, up 1.4% from Friday's close.

The non-banking finance company reported a write-back of INR 11.3 million against a provision of INR 1.38 billion last year, which also aided its net profit. Sundaram Finance reported a net profit of INR 5.46 billion for the March quarter.

The non-bank lender's interest income rose around 22% on year to INR 15.20 billion in the March quarter. While it rose at a decent pace on a yearly basis, the rise on quarter was a mere 2.8%. The sequential jump in net profit of Sundaram Finance was driven by a sharp increase in other income.

Sundaram Finance's other income was INR 405.4 million in the March quarter, against an outflow of INR 12.3 million under this head a year ago. Sequentially, it was up a whopping 158% from INR 157.0 million a quarter ago. The company also recorded an increase of over 400% in other income in the financial year 2024-25 (Apr-Mar) to INR 756.3 million.

The net profit in FY25 was up around 6% at INR 15.43 billion, aided by a rise in other income and a fall in provisions, which was down nearly 12% to INR 2.42 billion. Net interest income in FY25 rose 22% to INR 27.93 billion.

The assets under management of Sundaram Finance grew 17% on year to INR 514.76 billion as of Mar. 31. Disbursements in the March quarter rose 11% to INR 68.73 billion. In FY25, disbursements grew 9% to INR 284.05 billion.

"FY25 was marked by subdued demand due to an extreme summer, general elections, a dull festive season, and global volatility driven by tariff-related uncertainty as well as geopolitical complications," Rajiv Lochan, managing director of Sundaram Finance, said in a press release. "Looking ahead, we expect macroeconomic sentiments to improve on the rural front... and on the urban front. As private consumption improves, private sector capex (capital expenditure) will likely pick up. We are well positioned to continue our marathon running."

Sundaram Finance also announced a final dividend of INR 21 per share. The lender's gross stage 3 assets, which indicate loans overdue for more than 90 days, increased to 1.44% as of Mar. 31, up 18 basis points from last year. The net stage 3 assets also increased to 0.75% from 0.63% a year ago.

The capital adequacy ratio of the financier fell slightly to 20.4% as of Mar. 31, from 20.5% a year ago. The tier-I capital ratio stood at 17.4% as of Mar. 31, up from 16.8% a year ago. The gross non-performing asset ratio stood at 2.17% as of Mar. 31, up from 1.98% a year ago. The net non-performing asset ratio increased to 1.38%, from 1.25% as of Mar. 31, 2024.

Sundaram Finance's return on assets for FY25 was 2.85%, down from 3.18% for FY24. Return on equity also decreased to 16.30% in FY25 from 17.51% in FY24. The company's cost to income ratio improved to 30.80% in FY25 from 34.68% in FY24.  End

Edited by Rajeev Pai

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