Sundaram Fin January-March Profit Jumps 56% On Quarter, Beats Estimates

Sundaram Finance Ltd. on Monday reported a 56% jump in its net profit for the March quarter on a sequential basis, supported by a sharp rise in other income and a write-back in provisions. On a year-on-year basis, profit rose nearly 8%.

The non-banking finance company posted a net profit of ₹5.46 billion for the March quarter, above analyst estimates tracked by three brokerages. 

Profit was aided by a write-back of ₹11.3 million in provisions during the quarter, compared with a provision of ₹1.38 billion in the same period last year.

Interest income rose 22% on year to ₹15.20 billion, though the sequential growth was more modest at 2.8%. The highlight of the quarter was a surge in other income, which rose to ₹405.4 million from an outflow of ₹12.3 million a year ago. On a sequential basis, other income more than doubled from ₹157.0 million.

For the full year ended March 31, net profit rose 6% to ₹15.43 billion, supported by a sharp rise in other income and a 12% fall in provisions to ₹2.42 billion. Net interest income for the year increased 22% to ₹27.93 billion.

The company’s asset base continued to expand, with assets under management growing 17% on year to ₹514.76 billion as of Mar. 31. Disbursements rose 11% to ₹68.73 billion in the March quarter, taking the full-year tally to ₹284.05 billion, up 9%.

Managing Director Rajiv Lochan said demand was muted during the year due to several headwinds, including extreme summer weather, general elections, a sluggish festive season, and global uncertainties such as tariff-related disruptions and geopolitical tensions.

"Looking ahead, we expect macroeconomic sentiments to improve on both the rural and urban fronts. As private consumption improves, private sector capex is likely to pick up. We are well positioned to continue our marathon running," Lochan said in a press release.

The board declared a final dividend of ₹21 per share.

Asset quality weakened slightly, with gross stage 3 assets rising 18 basis points to 1.44%, and net stage 3 assets increasing to 0.75% from 0.63% a year ago. Gross non-performing assets rose to 2.17% from 1.98%, while net NPAs increased to 1.38% from 1.25%.
The capital adequacy ratio stood at 20.4% as of March 31, compared with 20.5% a year ago. Tier-I capital ratio improved to 17.4% from 16.8%.

Despite strong operating metrics, return ratios moderated. Return on assets fell to 2.85% in 2024-25 from 3.18% the previous year, while return on equity dropped to 16.30% from 17.51%. However, operating efficiency improved, with the cost-to-income ratio narrowing to 30.80% from 34.68% in 2023-24.