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Sundaram Finance has reported an 18 per cent growth in its standalone net profit at ₹226 crore for the quarter ended June 30, 2022, compared with net profit of ₹192 crore in the year-ago quarter, aided by lower finance cost and other expenses amid fall in interest income.
The leading NBFC’s interest income fell 5 per cent to ₹813 crore . (₹856 crore), while total income stood at ₹942 crore (₹956 crore).
With lower finance cost at ₹404 crore (₹459 crore), total expenses for the first quarter of this fiscal were lower at ₹645 crore (₹702.5 crore).
However, its disbursements grew 138 per cent at ₹4,895 crore, the highest-ever in a quarter, compared to ₹2,060 crore in the second-wave impacted Q1FY22. With a net accretion of ₹26 crore, the deposit base stood at ₹4,129 crore as of June 2022 quarter.
“We have re-established our pre-pandemic growth trajectory with the highest-ever first quarter disbursements and 138 per cent growth over the first quarter of last year. Coupled with continued strong improvement in our asset quality levels and a healthy 18 per cent increase in profits, we have delivered a strong quarter of growth with quality and profitability,” said Harsha Viji, Executive Vice-Chairman of Sundaram Finance.
Gross stage 3 as of June 30, 2022, stood at 2.51 per cent with 49 per cent provision cover as against 4.25 per cent with provision cover of 27 per cent as of June 30, 2021. Net stage 3 as of June 30, 2022, closed at 1.30 per cent as against 3.12 per cent of June 30, 2021. As of June 30, 2022, Gross & Net NPA as per the existing RBI norms are 2.66 per cent & 1.41 per cent as against 4.59 per cent & 3.38 per cent as of June 30, 2021.
“If the company had adopted the provisions of the November 12, 2021 circular from the RBI, the gross and net NPA would be 5.22 per cent and 3.83 per cent respectively, ‘‘ said a statement.
The total restructured assets under Covid relief measures enabled by the RBI were at ₹1,234 crore, about 4.07 per cent of the loan outstanding, as of June 30, 2022
Sees continued recovery
“The first quarter is off to a strong start and to plan. We regained share across most asset classes and remain focused on extending our share in all markets. We expect a continued recovery in the commercial vehicles segment, especially medium & heavy commercial vehicles. Prospects for our growth segments of construction equipment, tractor & farm equipment as well as commercial lending continue to remain bright. Demand for passenger vehicles remains strong, constrained only by supply,” said Rajiv Lochan, Managing Director.
The assets under management stood at ₹30,552 crore as of June 30, 2022, against ₹29,823 crore as of June 30, 2021.
Return on assets at 2.5 per cent improved over Q1 FY22 (2.2 per cent) and capital adequacy at 24.1 per cent remains quite comfortable to support planned growth.
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