Money & Banking

Sundaram Finance FY 13 net rises 15% despite challenges

Our Bureau Chennai | Updated on March 12, 2018 Published on May 29, 2013

T.T. Srinivasaraghavan (left), Managing Director, Sundaram Finance Ltd, and M. Ramaswamy, CFO, announcing the company’s results in Chennai on Wednesday. — Bijoy Ghosh

T.T. Srinivasaraghavan (left) , Managing Director, Sundaram Finance Ltd and M. Ramaswamy, CFO, at a press conference, in Chennai on Wednesday. - Photo: Bijoy Ghosh

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The year 2012-13 was difficult in general, and “we expect a lot of headwinds this year too,” said T. T. Srinivasaraghavan, Managing Director, Sundaram Finance.

Last year, most segments of the automotive industry witnessed a drop in sales, compared to the previous year, reflecting the difficult economic environment.

Despite the medium and heavy commercial vehicles sector registering a 28 per cent fall in sales during the year, Sundaram Finance managed to post 6 per cent growth in disbursements “mainly due to the company’s customer-relationship strategy,” he said.

The NBFC posted a 15 per cent growth in net profit in 2012-13 at Rs 410 crore, against Rs 355 crore in the previous year. This growth comes despite the Rs 15.81-crore provisioning made for assets whose instalments were overdue for 120 days and above, as against the regulatory requirement of 180 days and above.

“We have chosen to do it as a measure of prudence, to adopt more stringent norms ahead of the regulatory requirement,” he said.

Despite the stricter asset classification norms adopted by the company, its gross non-performing assets and net non-performing assets stood at 1.04 per cent and 0.45 per cent, respectively, which areone of the best in the industry.

Disbursements grew by 6 per cent to Rs 9,991 crore compared with Rs 9,432 crore last year.

The company’s total receivables rose 13.5 per cent to Rs 17,645 crore as at March 31, 2013. Its capital-adequacy ratio stood at 17.85 per cent, “comfortably above the regulatory requirement”.

Also, its net worth crossed the Rs 2,000-crore mark last year. The company’s board has recommended a final divided of Rs 4.50 per share. This, along with the interim dividend of Rs 4.50 per share, takes the total dividend for the year to Rs 9/share, on the enhanced share capital of Rs 111 crore.

Last year, it paid Rs 15.50/share, on a paid-up capital of Rs 55.50 crore. The company issued a 1:1 bonus in 2013.

Expansion drive

As the SIAM (Society of Indian Automobile Manufacturers) forecast for 2013-14 is not very rosy, the company plans to strengthen its presence in the north, west and central regions of the country, to sustain the growth momentum.

Besides, the company had recently entered into financing the light commercial vehicles segment, where there is “a lot of headroom for growth”, Srinivasaraghavan said.

On whether Sundaram Finance will apply for banking licence, he said, “There is not one compelling reason why we should become a bank, and not one reason why we should not remain what we are today.”

ravikumar.r@thehindu.co.in

Published on May 29, 2013
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