Capitaline

Results 10-Nov-21

Analysis

Sundaram Finance

Disbursements jumps, asset quality improves

Sundaram Finance Company reported 8% decline, on consolidated basis, in the net profit to Rs 259.04 crore for the quarter ended September 2021 (Q2FY2022). The company has improved the net interest margin to 8.16% in Q2FY2022 from 6.59% in the previous quarter and 6.25% in the corresponding quarter last year. The net interest income (NII) of the company moved up 27% to Rs 608.41 crore in Q2FY2022.

The Asset Under Management (AUM) declined 2% to Rs 29811 crore at end September 2021. However, the company has improved asset quality, while reducing the NNPA ratio in Q2FY2022.

Income from operations of the company was flat at Rs 1293.19 crore in the quarter ended September 2021. Interest expense declined 20% to Rs 546.80 crore, while other expenses (including staff cost of Rs 105.24 crore and other expenses of Rs 44.89 crore) increased 9% to Rs 227.63 crore. Ensuing Gross profit improved 27% to Rs 524.56 crore.

Depreciation declined 4% to Rs 21.82 crore, while provision and write offs surged 191% to Rs 198.73 crore. PBT as a result declined 6% to Rs 304.01 crore. Effective tax rate increased to 29.6% in Q2FY2022 from 26.4% in Q2FY2021.

The net profit before minority interest and associate profit declined 10% to Rs 214.14 crore in the quarter ended September 2021. The minority interest fell 2% to Rs 14.76 crore, while the profit from associate eased 1% to Rs 59.66 crore. The final bottomline of the company declined 8% to Rs 259.04 crore in the quarter ended September 2021.

Business performance and Asset quality

AUM of the company declined 2% to Rs 29811 crore, driven by commercial vehicles loan book fall 11% to Rs 13773 crore, while construction equipment loans declined 3% to Rs 3309 crore. However, the cars loan book rose 2% to Rs 7512 crore, tractors 8% to Rs 2355 crore and other loans 36% to Rs 2862 crore end September 2021. The disbursements of the company increased 14% to Rs 3621.00 crore in the quarter ended September 2021.

The branch network of the company stood at 954 branches at end September 2021. The employee count of the company stood at 7742 employees.

The gross stage 3 assets ratio declined to 3.45% at end September 2021 and Net NPA ratio dipped to 2.12% at end September 2021 from 4.25% and 3.12% a quarter ago.

Book value of the company on a consolidated basis stood at Rs 746.9 per share at end September 2021, while the adjusted book value (net of NNPA) stood at Rs 690.0 per share at end September 2021.

Financial Performance H1FY2022:

For the half year ended September 2021 (H1FY2022), the Company reported 1% decline in income from operations at Rs 2550.32 crore. Other income declined 10% to Rs 10.99 crore compared with Rs 12.17 crore in H1FY2021. The total income fell 1% to Rs 2561.31 crore. Interest expense dipped 17% to Rs 1139.58 crore, while other expenses rose 5% to Rs 442.20 crore. Ensuing Gross profit increased 25% to Rs 979.53 crore. Depreciation declined 6% to Rs 41.92 crore, while provision and write offs galloped 101% to Rs 308.90 crore. PBT moved up 7% to Rs 628.71 crore. Effective tax rate stood at 27.2% compared to 25.9% in the corresponding period last year. The net profit before minority interest and associate profit rose 6% to Rs 457.50 crore. The minority interest jumped 436% to Rs 39.51 crore, while the profit from associate was flat at Rs 126.54 crore. The final bottomline of the company declined 1% to Rs 544.53 crore in H1FY2022.

Sundaram Finance: Consolidated Financial Results
Particulars	2109 (3)	2009 (3)	Var %	2109 (6)	2009 (6)	Var %	2103 (12)	2003 (12)	Var %
Income from operations	1293.19	1298.71	0	2550.32	2570.70	-1	5247.66	4695.43	12
Other Income	5.80	7.18	-19	10.99	12.17	-10	69.08	43.35	59
Total Income	1298.99	1305.89	-1	2561.31	2582.87	-1	5316.74	4738.78	12
Interest Expenses	546.80	681.71	-20	1139.58	1377.19	-17	2659.39	2427.45	10
Other expenses	227.63	209.79	9	442.20	422.66	5	866.52	875.86	-1
Gross profit	524.56	414.39	27	979.53	783.02	25	1790.83	1435.47	25
Depreciation	21.82	22.65	-4	41.92	44.67	-6	92.97	89.56	4
Provisions and write off	198.73	68.30	191	308.90	153.48	101	368.29	330.12	12
PBT	304.01	323.44	-6	628.71	584.87	7	1329.57	1015.79	31
Provision for tax	89.87	85.54	5	171.21	151.28	13	327.53	210.49	56
PAT	214.14	237.90	-10	457.50	433.59	6	1002.04	805.30	24
Minority Interest After NP	14.76	15.12	-2	39.51	7.37	436	57.91	53.87	7
Profit/Loss of Associate Company	59.66	60.29	-1	126.54	126.11	0	220.96	40.11	451
Net Profit	259.04	283.07	-8	544.53	552.33	-1	1165.09	791.54	47
EPS*(Rs)	93.3	101.9		98.0	99.4		104.9	71.2
* annualized on current equity of Rs 111.1 crore. Face Value: Rs 10, Figures in Rs Crore.
Source: Capitaline Corporate Database

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