Sundaram Finance Q3 Results: 16% PAT Growth, ₹349 Cr Profit, 140% Dividend Declared, AUM Surges 19%

Sundaram Finance Q3 Results: 16% PAT Growth, ₹349 Cr Profit, 140% Dividend Declared, AUM Surges 19%

Sundaram Finance Ltd: Overview 

Sundaram Finance Ltd (SFL) is one of India’s leading non-banking financial companies (NBFCs), specializing in vehicle financing, housing finance, asset management, and general insurance. Established in 1954, the company has built a strong reputation for trust and financial stability, offering a diversified portfolio of financial services. With a robust presence across India, SFL primarily focuses on financing commercial vehicles, passenger cars, construction equipment, and tractors. The company has also expanded into home loans, mutual funds, and insurance through its subsidiaries, ensuring a comprehensive financial ecosystem for its customers. SFL’s business model revolves around prudent lending practices, customer-centric policies, and efficient risk management. The company has successfully navigated economic cycles while maintaining consistent growth in its assets under management (AUM). Its well-capitalized balance sheet, disciplined underwriting, and strategic expansion into rural and semi-urban areas have helped SFL maintain a strong foothold in India’s financial sector. The Indian non-banking financial company (NBFC) sector is poised for steady growth, driven by increasing vehicle ownership, rising infrastructure investments, and a growing demand for housing finance. The NBFC segment plays a crucial role in providing credit to sectors underserved by traditional banks, including small businesses and rural borrowers. With India’s economy expected to expand steadily, demand for vehicle and equipment financing is anticipated to grow, benefiting players like Sundaram Finance. However, challenges such as regulatory changes, interest rate fluctuations, and competition from fintech companies could impact growth in the NBFC space. Despite these challenges, well-managed companies with strong balance sheets and diversified portfolios, such as SFL, are well-positioned to capitalize on growth opportunities. 

Latest Stock News 

The total Assets Under Management (AUM) saw a 19% increase, reaching ₹50,199 crore. On a consolidated basis, the AUM stood at ₹75,708 crore as of December 2024, compared to ₹63,658 crore in December 2023. The Company’s gross stage 3 assets, which include loans overdue for more than 90 days, were recorded at 1.70% as of December 2024, slightly improving from 1.77% in December 2023. Net Stage 3 assets also showed an improvement, declining to 0.97% from 1.02% during the same period. The company announced key leadership appointments and reappointments. Mr. Mukund Raghavan was appointed as the Chief Risk Officer for a three-year term effective from November 15, 2024, replacing Mr. N. Raman, who is set to retire on November 14, 2024. Additionally, Mr. V. Vaasen was reappointed as the Head of Internal Audit for another three-year term starting March 1, 2025. Further strengthening its leadership team, the company appointed Mr. Ajit Narasimhan as Head of Strategy & Planning effective October 1, 2024, and Mrs. Bama Balakrishnan as Senior Vice President – Finance from October 7, 2024 

Business Segments

• Vehicle Finance: This segment is the company’s largest division, offering loans for commercial vehicles, passenger cars, two-wheelers, and construction equipment. It maintains a strong market presence, catering to retail and fleet operators. 

• Housing Finance: This division is a subsidiary Sundaram Home Finance, provides home loans and mortgage-backed products, focusing on affordable housing and mid-segment home buyers. 

• Asset Management: This segment is managed through Sundaram Asset Management Company, which handles mutual fund investments, catering to both retail and institutional investors, with a strong focus on equity and debt funds. 

• General Insurance: This segment operates through Royal Sundaram General Insurance, offering motor, health, and commercial insurance products, ensuring a diversified financial portfolio. 

Subsidiary Information: 

• Sundaram Home Finance Ltd: Sundaram Home Finance Ltd. is the housing finance subsidiary of Sundaram Finance, focusing on providing affordable housing loans and loan products for residential properties. The company caters to salaried and self-employed individuals, helping them purchase, construct, or renovate homes. It operates across various Indian cities, supporting the government’s push toward affordable housing through competitive interest rates and flexible loan structures. With a growing home loan portfolio, Sundaram Home Finance has been instrumental in expanding Sundaram Finance’s footprint in the real estate finance segment, leveraging its parent company’s strong credibility and customer-centric approach. 

• Sundaram Asset Management Company Ltd: Sundaram Asset Management Company Ltd. is a leading player in the mutual fund industry, managing a diversified portfolio of equity, debt, and hybrid funds. It caters to retail investors, corporates, and institutional clients, offering financial solutions that align with varying risk appetites. The company has a strong reputation in equity-oriented schemes and has consistently delivered value through its research-driven investment strategy. With increasing investor participation in capital markets, Sundaram Asset Management continues to expand its offerings, embracing digital transformation to enhance customer experience and operational efficiency. 

• Royal Sundaram General Insurance Co. Ltd: Royal Sundaram General Insurance is a key subsidiary offering a broad range of insurance products, including motor, health, fire, marine, and commercial insurance. As one of India’s premier private general insurers, the company has a strong presence in retail and corporate segments. It has built a vast distribution network and developed innovative insurance solutions to cater to evolving customer needs. The company’s robust underwriting expertise and a strong claims settlement record position it as a leading player in the general insurance industry. Sundaram Finance’s backing has helped Royal Sundaram scale its operations and enhance financial inclusion through customized products and digital initiatives. 

• Sundaram Finance Holdings Ltd: Sundaram Finance Holdings Ltd. is the investment arm of Sundaram Finance, specializing in strategic investments across the auto components and financial services sectors. It holds key stakes in various businesses, helping Sundaram Finance expand its market influence while ensuring capital appreciation through long-term investment strategies. The company also supports the parent’s non-banking financial activities by investing in allied industries that align with Sundaram Finance’s core business vision. With a disciplined approach to capital allocation, Sundaram Finance Holdings continues to contribute to the financial stability and expansion of the group. 

• Sundaram Finance Ltd. (Retail Deposits & Wealth Advisory Division): This division focuses on offering fixed deposits, wealth management, and advisory services. Sundaram Finance is renowned for its safe and customer-centric deposit schemes, attracting retail and institutional investors seeking stable returns. Its wealth advisory arm helps clients with financial planning, investment strategies, and portfolio management. The company leverages its decades-long trust and financial expertise to provide customized wealth solutions. The division plays a crucial role in diversifying Sundaram Finance’s revenue streams and enhancing customer engagement beyond traditional lending services. 

Q3 FY25 Earnings 

• Revenue of ₹2190 crore in Q3 FY25 up by 20.2% YoY from ₹1821 crore in Q3 FY24.  

• Financing Profit of ₹642 crore in this quarter at a margin of 29% compared to 31% in Q3 FY24. 

• Profit of ₹455 crore in this quarter compared to a ₹506 crore profit in Q3 FY24. 

Financial Summary 

Amount in ₹ Cr	Q3 FY24	Q3 FY25	FY23	FY24
Revenue	1821	2190	5501	7274
Interest	910	1087	2410	3418
Expenses	351	462	1285	1632
Financing Profit	561	642	1806	2224
Financing Margin	31%	29%	33%	31%
Other Income	7	17	43	-80
Net Profit	506	455	1510	1842
NPM	27.8%	20.8%	27.4%	25.3%
EPS	38.5	41	119.5	129.3