Capitaline

Results 08-Feb-22

Analysis

Sundaram Finance

AUM declines 5%, disbursements down 11% in Q3FY2022

Sundaram Finance Company reported 16% decline, on standalone basis, in the net profit to Rs 288.83 crore for the quarter ended December 2021 (Q3FY2022). The company has witnessed decline in the net interest margin on sequential basis to 9.87% in Q3FY2022 from 10.01% in the previous quarter, while margin has improved from 6.89% in the corresponding quarter last year. The net interest income (NII) of the company rose 1% to Rs 735.27 crore in Q3FY2022. The Asset Under Management (AUM) declined 5% to Rs 29796 crore at end December 2021. Income from operations of the company declined 8% to Rs 1286.26 crore in the quarter ended December 2021. Interest expense dipped 17% to Rs 550.99 crore, while other expenses (including staff cost of Rs 152.94 crore and other expenses of Rs 88.38 crore) increased 11% to Rs 241.32 crore. Ensuing Gross profit fell 3% to Rs 497.49 crore.

Depreciation rose 8% to Rs 25.32 crore, while provision and write offs jumped 63% to Rs 125.23 crore. PBT as a result declined 16% to Rs 346.94 crore. Effective tax rate increased to 24.2% in Q3FY2022 from 24.0% in Q3FY2021.

The net profit before minority interest and associate profit declined 16% to Rs 262.87 crore in the quarter ended December 2021. The minority interest increased 18% to Rs 25.67 crore, while the profit from associate rose 4% to Rs 51.63 crore. The final bottomline of the company declined 16% to Rs 288.83 crore in the quarter ended December 2021.

Business performance and Asset quality

AUM of the company declined 5% to Rs 29796 crore, driven by commercial vehicles loan book falling 10% to Rs 13617 crore, while cars loan book was flat at Rs 7687 crore at end December 2021. The construction equipment loans also declined 5% to Rs 3307 crore. However, the tractors loan book rose 7% to Rs 2413 crore and other loans 2% to Rs 2771 crore at end December 2021.

The disbursements of the company declined 11% to Rs 3843.00 crore in the quarter ended December 2021.

The branch network of the company stood at 960 branches at end December 2021. The employee count of the company stood at 7740 employees at end December 2021.

The gross stage 3 assets ratio eased to 3.39% at end December 2021 and Net NPA ratio declined to 2.09% at end December 2021 from 3.45% and 2.12% a quarter ago.

Book value of the company on a standalone basis stood at Rs 772.9 per share at end December 2021, while the adjusted book value stood at Rs 716.8 per share at end December 2021.

Financial Performance 9MFY2022:

For the nine months ended December 2021 (9MFY2022), the Company reported 3% decline in Income from operations at Rs 3836.58 crore on a standalone basis. Other income fell 10% to Rs 14.52 crore compared with Rs 16.12 crore in 9MFY2021. The total income eased 3% to Rs 3851.10 crore. Interest expense dipped 17% to Rs 1690.57 crore, while other expenses rose 7% to Rs 683.52 crore. Ensuing Gross profit increased 14% to Rs 1477.01 crore. Depreciation declined 1% to Rs 67.24 crore, while provision and write offs galloped 88% to Rs 434.13 crore.

PBT fell 2% to Rs 975.64 crore. Effective tax rate stood at 26.2% compared to 25.1% in the corresponding period last year. The net profit before minority interest and associate profit declined 4% to Rs 720.36 crore. The minority interest jumped 124% to Rs 65.18 crore, while the profit from associate rose 2% to Rs 178.17 crore. The final bottomline of the company declined 7% to Rs 833.35 crore in 9MFY2022.

Sundaram Finance: Consolidated Financial Results
Particulars	2112 (3)	2012 (3)	Var %	2112 (9)	2012 (9)	Var %	2103 (12)	2003 (12)	Var %
Income from operations	1286.26	1390.99	-8	3836.58	3962.49	-3	5247.66	4695.43	12
Other Income	3.54	4.74	-25	14.52	16.12	-10	69.08	43.35	59
Total Income	1289.80	1395.73	-8	3851.10	3978.61	-3	5316.74	4738.78	12
Interest Expenses	550.99	663.95	-17	1690.57	2041.14	-17	2659.39	2427.45	10
Other expenses	241.32	217.45	11	683.52	640.11	7	866.52	875.86	-1
Gross profit	497.49	514.33	-3	1477.01	1297.36	14	1790.83	1435.47	25
Depreciation	25.32	23.39	8	67.24	68.06	-1	92.97	89.56	4
Profit before tax and Provisions	472.17	490.94	-4	1409.77	1229.30	15	1697.86	1345.91	26
Provisions and write off	125.23	76.96	63	434.13	230.45	88	368.29	330.12	12
Profit before tax	346.94	413.98	-16	975.64	998.85	-2	1329.57	1015.79	31
Provision for tax	84.07	99.47	-15	255.28	250.75	2	327.53	210.49	56
PAT	262.87	314.51	-16	720.36	748.10	-4	1002.04	805.30	24
Minority Interest After NP	25.67	21.68	18	65.18	29.05	124	57.91	53.87	7
Profit/Loss of Associate Company	51.63	49.42	4	178.17	175.53	2	220.96	40.11	451
Net Profit	288.83	342.25	-16	833.35	894.58	-7	1165.09	791.54	47
EPS*(Rs)	104.0	123.2		100.0	107.4		104.9	71.2
* Post EO 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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