Capitaline

Results 08-Nov-22

Analysis

Sundaram Finance

AUM growth improves to 7%, disbursements up 42% in Q2FY2023

Sundaram Finance Company reported 18% growth, on consolidated basis, in the net profit to Rs 306.13 crore for the quarter ended September 2022 (Q2FY2023). The company has improved the net interest margin to 9.49% in Q2FY2023 from 9.24% in the previous quarter, while remained lower from 10.01% in the corresponding quarter last year. The net interest income (NII) of the company moved up 2% to Rs 758.71 crore in Q2FY2023. The Asset Under Management (AUM) increased at improved pace of 7% to Rs 31980 crore at end September 2022. The company has maintained stable asset quality in Q2FY2023.

Income from operations of the company increased 3% to Rs 1336.82 crore in the quarter ended September 2022. Interest expense moved up 6% to Rs 578.11 crore, while other expenses (including staff cost of Rs 167.78 crore and other expenses of Rs 116.93 crore) increased 25% to Rs 284.71 crore. Ensuing Gross profit declined 9% to Rs 476.79 crore.

Depreciation jumped 49% to Rs 32.56 crore, while provision and write offs dipped 78% to Rs 44.00 crore. PBT as a result rose 32% to Rs 400.23 crore. Effective tax rate rose slightly to 29.8% in Q2FY2023 from 29.6% in Q4FY2021. The net profit before minority interest and associate profit increased 31% to Rs 280.97 crore in the quarter ended September 2022. The minority interest jumped 72% to Rs 25.44 crore, while the profit from associate declined 15% to Rs 50.60 crore. The final bottomline of the company increased 18% to Rs 306.13 crore in the quarter ended September 2022.

Business performance and Asset quality

AUM of the company increased 7% to Rs 31980 crore, driven by commercial vehicles loan book rising 8% to Rs 14839 crore, while cars loan book also moved up 10% to Rs 8251 crore at end September 2022. The construction equipment loans increased 4% to Rs 3454 crore, tractors 7% to Rs 2526 crore and other loans 2% to Rs 2910 crore at end September 2022.

The disbursements of the company declined 42% to Rs 5139 crore in the quarter ended September 2022.

The branch network of the company stood at 989 branches at end September 2022 against 954 branches at end September 2021. The employee count of the company stood at 8254 employees at end September 2022 from 7742 employees at end September 2021.

The gross stage 3 assets ratio was nearly stable at 2.54% at end September 2022 and Net NPA ratio at 1.37% at end September 2022 from 2.51% and 1.30% a quarter ago.

Book value of the company on a standalone basis stood at Rs 831.7 per share at end September 2022, while the adjusted book value stood at Rs 777.9 per share at end September 2022.

Financial Performance H1FY2023:

For the half year ended September 2022 (H1FY2023), the Company reported 1% rise in Income from operations at Rs 2582.85 crore on a standalone basis. Other income declined 14% to Rs 9.43 crore compared with Rs 10.99 crore in H1FY2022. The total income moved up 1% to Rs 2592.28 crore. Interest expense fell 2% to Rs 1118.62 crore, while other expenses rose 23% to Rs 542.88 crore. Ensuing Gross profit declined 5% to Rs 930.78 crore. Depreciation jumped 46% to Rs 61.30 crore, while provision and write offs dipped 62% to Rs 116.66 crore. PBT moved up 20% to Rs 752.82 crore. Effective tax rate stood at 28.5% compared to 27.2% in the corresponding period last year. The net profit before minority interest and associate profit rose 18% to Rs 538.44 crore. The minority interest jumped 44% to Rs 56.91 crore, while the profit from associate dipped 44% to Rs 70.26 crore. The final bottomline of the company rose 1% to Rs 551.79 crore in H1FY2023.

Sundaram Finance: Consolidated Financial Results
Particulars	2209 (3)	2109 (3)	Var %	2209 (6)	2109 (6)	Var %	2203 (12)	2103 (12)	Var %
Income from operations	1336.82	1293.19	3	2582.85	2550.32	1	5108.37	5247.66	-3
Other Income	2.79	5.80	-52	9.43	10.99	-14	37.30	69.08	-46
Total Income	1339.61	1298.99	3	2592.28	2561.31	1	5145.67	5316.74	-3
Interest Expenses	578.11	546.80	6	1118.62	1139.58	-2	2236.20	2659.39	-16
Other expenses	284.71	227.63	25	542.88	442.20	23	981.74	866.52	13
Gross profit	476.79	524.56	-9	930.78	979.53	-5	1927.73	1790.83	8
Depreciation	32.56	21.82	49	61.30	41.92	46	101.17	92.97	9
Profit before tax and Provisions	444.23	502.74	-12	869.48	937.61	-7	1826.56	1697.86	8
Provisions and write off	44.00	198.73	-78	116.66	308.90	-62	409.93	368.29	11
Profit before tax	400.23	304.01	32	752.82	628.71	20	1416.63	1329.57	7
Provision for tax	119.26	89.87	33	214.38	171.21	25	350.01	327.53	7
PAT	280.97	214.14	31	538.44	457.50	18	1066.62	1002.04	6
Minority Interest After NP	25.44	14.76	72	56.91	39.51	44	122.90	57.91	112
Profit/Loss of Associate Company	50.60	59.66	-15	70.26	126.54	-44	229.62	220.96	4
Net Profit	306.13	259.04	18	551.79	544.53	1	1173.34	1165.09	1
EPS*(Rs)	110.2	93.3		99.3	98.0		105.6	104.9
Adj BV (Rs)	777.9	669.0		777.9	669.0		749.8	658.8
* Post EO annualized on current equity of Rs 111.1 crore. Face Value: Rs 10, Figures in Rs Crore, Figures as per Ind AS
Source: Capitaline Corporate Database

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