Sundaram Finance Ltd (SFL) reported a 44 per cent increase in its standalone net profit at ₹304 crore for Q2 FY23, compared with a net profit of ₹211 crore in the year-ago quarter, aided by lower expenses amid fall in interest income.

The interest income came in lower at ₹842 crore (₹861 crore), while total income was higher at ₹1,048 crore (₹1,022 crore), supported by higher dividend income and other non-interest income components.

However, total expenses recorded a significant fall to ₹653 crore (₹747 crore). Disbursements were up 42 per cent at ₹5,139 crore (₹3,621 crore).

‘Satisfying quarter’

“Economic activity remained robust through Q2. We delivered strong growth, continuing the momentum from Q1, to gain and extend our market share across most asset classes. Our asset quality continued to improve. Overall, it has been a satisfying quarter of growth with quality and profitability,” Harsha Viji, Executive Vice Chairman, SFL said in a statement.

For H1 FY23, the company’s standalone profit after tax stood at ₹529 crore (₹402 crore), an increase of 32 per cent. Interest income was lower at ₹1,654 crore (₹1,716 crore), while total expenses saw a dip to ₹1,298 crore (₹1,449 crore).

Total disbursements reported a whopping 77 per cent growth at ₹10,034 crore (highest-ever disbursements in a half-year period) in H1 (₹5,681 crore), supported by significant growth in all asset classes and geographies in Q2.

“It has been a record-setting quarter and half year for team Sundaram with highest ever H1 disbursements. Coupled with continuing improvement in asset quality to remain best-in-class and strong profit growth, it has been an all-round strong quarter. The external environment is likely to witness some softening in the second half as the RBI’s withdrawal of pandemic accommodation gains traction and global geopolitical and monetary policy shifts continue to unfold,” said Rajiv Lochan, Managing Director.

NPAs rise

The gross and net NPAs stood at 4.29 per cent and 2.97 per cent, respectively (as per old norms, the gross and net NPA were 2.67 per cent and 1.48 per cent, respectively) as of September 30, as against 3.85 per cent and 2.48 per cent as of September 30, 2021.

The total restructured assets under Covid relief measures were at ₹927 crore, about 2.9 per cent of loan outstanding, as on September 30, 2022.

Return on assets for H1 FY23 closed at 2.9 per cent (2.3 per cent in H1 FY22). Return on equity was at 14.9 per cent (12.7 per cent). If investments in subsidiaries and group companies are excluded, core ROE was at 16.4 per cent for H1 (15.4 per cent).

The assets under management stood at ₹31,980 crore as on September 30, 2022 (₹29,811 crore).

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