The Hindu Business Line : Sundaram Finance operating profit rises 22%

Score card: Mr T.T. Srinivasaraghavan (left), Managing Director, Sundaram Finance, and Mr S. Venkatesan, Executive Director (Finance), at a press conference in Chennai on Wednesday - Bijoy Ghosh

Chennai May 30 Sundaram Finance Ltd (SFL) has reported an operating net profit of Rs 100.47 crore for the year ended March 31, a growth of 22 per cent over the previous year.

The company had reported a net profit of Rs 170 crore last year, but about Rs 88 crore was from a one-time profit on sale of its stake in Sundaram Asset Management Company. Income from operations was up 25 per cent at Rs 1,077 crore.

SFL's disbursements were up 28 per cent at Rs 4,386 crore (Rs 3,422 crore). The company had indicated last year that it expected to grow by about 10-15 per cent in 2006-07. It maintains the same guidance for the current fiscal also.

About 59 per cent of the disbursements were towards the commercial vehicles segment, while 25 per cent were towards cars and jeeps and 7 per cent towards construction equipment.

The board of directors of Sundaram Finance Ltd has recommended a final dividend of 20 per cent for the year ended March 31, 2007, which along with the interim dividend of 85 per cent takes the total dividend for the year to 105 per cent.

Commenting on the FY07 performance, Mr T.T. Srinivasaraghavan, Managing Director, Sundaram Finance Ltd, said "This has been a year of strong growth for the automobile industry, with medium and heavy commercial vehicles leading the way. We have gained a market share in the `medium and HCV' segment."

The commercial vehicles industry grew 33 per cent last year while the company's disbursements in this segment grew 36 per cent. Mr Srinivasaraghavan said the company had a market share of 11-12 per cent in commercial vehicles segment.

Asked if there was a slowdown in commercial vehicles segment, he pointed to early indicators - the April 2007 commercial vehicles sale numbers being marginally lower than that of April 2006. However, he said, it was too soon to make a judgment on this. After four years of good growth, some plateauing in growth was expected.

Capital adequacy (CRAR) at 13.47 per cent while net NPA was at 0.54 per cent.

Subsidiaries & Jt ventures

Sundaram BNP Paribas Mutual: The Assets Under Management (AUM) grew to Rs 7,500 crore. The PAT grew to Rs 5.74 crore in 2006-07 from Rs 19 lakh in 2005-06

Sundaram Home Finance (Home loan business), in which UCB, a subsidiary of BNP Paribas, recently signed an agreement to acquire a 49.9 per cent stake, saw net profit more than doubling to Rs 14.60 crore from Rs 5.86 crore a year ago.

Disbursements as on March 31, 2007 were at Rs 477 crore. Net NPA was at 0.61 per cent.

Royal Sundaram's revenues grew by 30 per cent to Rs 601 crore, while profits grew to Rs 21.19 crore from Rs 8.63 crore in previous fiscal. Around 65 per cent of the portfolio was retail.

Fixed deposit rates

SFL's interest rates on deposits, effective May 1, 2007 have been hiked to 9.5 per cent, 10 per cent and 10.5 per cent on 1 year, 2 year and 3 year deposits, respectively.

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