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Our Bureau

Chennai, Oct. 28 Despite the Rs 4-crore increase in ‘other income’, Sundaram Finance has reported a 11-per cent drop in its net profit for the July-September quarter of the current year.

The net profit declined to Rs 32 crore from Rs 36 crore in the corresponding quarter of last year. Notably, its ‘other operating income’ dropped to Rs 1.70 crore, from Rs 15.86 crore in the second quarter of last year.

A footnote to the statement of results says that the ‘other operating income’ includes profit on securitisation and sale of investments in mutual funds.

When asked, Sundaram Finance’s Managing Director, Mr T. T. Srinivasa Raghavan, did not give a break-up of the ‘other operating income’, but said that the company saw a market opportunity in securitisation last year, which was not there in the current year.

Last year, Sundaram Finance had sold off loans worth about Rs 700 crore, he said.

Sundaram Finance is in the business of lending (mainly) for the purchase of commercial vehicles.

That its raw material - money - turned dear shows up in ‘financial expenses’. Financial expenses (Rs 162.25 crore) works out to 62 per cent of ‘income from operations’ compared with 58 per cent for the comparable quarter of last year.

Sequentially, cost of funds rose by a full 200 basis points in the quarter under review, over the previous quarter, Mr Srinivasa Raghavan said.

Earnings per share declined to Rs 5.84 from Rs 6.52 previously, because of an issue of bonus shares in August, which raised the paid-up equity capital from Rs 27.78 crore to Rs 55.55 crore.

More Stories on : Financial Performance | NBFCs

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