Sundaram Home Q3 net up 36% on realty recovery

Sundaram Home Finance has reported a 36 per cent increase in its net profit at ₹56.24 crore for the quarter ended December 31, 2020 compared with ₹41.31 crore registered in Q3 of the previous fiscal, aided by recovery in major markets.

Disbursements for December quarter stood at ₹ 416.57 crore compared to ₹536.33 crore in the year-ago quarter.

“We have seen a revival of real estate markets all across major metros as well as smaller towns. A few States have also driven the demand revival through a reduction in stamp duty and premium. In addition, builders/developers have softened prices to liquidate stock,” Lakshminarayanan Duraiswamy, Managing Director, Sundaram Home Finance, said in a statement.

He added that interest rates were at an all-time low making it quite unprecedented from a home buyer perspective. “We are nearing pre-Covid levels in terms of new business and that is a positive sign of the growth coming back,” he said.

The company’s deposit base stood at ₹1,825 crore as on December 31, 2020.

Growing demand

Sundaram Home Finance is presently witnessing renewed interests from builders in terms of new launches, across locations.

“From a residential housing perspective, demand for ready-to-move-in homes is the first one to take off. Affordable housing segment continues to grow at a fast pace with the demand continuing to be quite attractive,” he added.

The company raised over ₹3,600 crore in the first nine months of the year through a mix of debt instruments, term lending from banks, fixed deposits and refinance from the National Housing Bank.

On the outlook, he said: “There is a shortage of houses and the pent-up demand is huge. Our outlook is positive as we believe there is enough room to grow the business. Our focus will continue to be on the Southern market as that offers huge opportunities.”

Budget expectations

Lakshminarayanan said he is looking forward to an increase in interest subsidy on home loans, infrastructure status for all residential projects in tier-2 and tier-3 towns to boost demand and for greater push in employment generation to aid housing demand.