Chennai-based Sundaram Finance on Monday reported an 18% jump in profit after tax (PAT) to Rs 226 crore for the first quarter of FY23 as against Rs 192 crore in the corresponding quarter of the last fiscal year. Total income of the non-banking financial company stood at Rs 942 crore as against Rs 956 crore last year, registering a 1.5% decline. It logged the highest-ever Q1 disbursements of Rs 4,895 crore, marking 138% increase over Q1FY22, and up by 31% sequentially over Q4 FY22.
Executive vice-chairman Harsha Viji said, “We have re-established our pre-pandemic growth trajectory with the highest-ever first quarter disbursements of Rs 4,895 crore. Coupled with continued strong improvement in our asset quality levels and a healthy 18% increase in profits, we have delivered a strong quarter of growth with quality and profitability. Overall economic activity continues to improve across all segments despite inflationary concerns and related interest rate hikes.”
Gross stage 3 stood at 2.51% with provision cover of 49% as against 4.25% as on June 30, 2021, with provision cover of 27%. Return on assets at 2.5% improved over Q1 FY22 (2.2%) and capital adequacy at 24.1% remains quite comfortable to support planned growth.
Managing director Rajiv Lochan said, “We regained share across most asset classes and remain focused on extending our share in all markets. We expect 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.”
The assets under management stood at Rs 30,552 crore as against Rs 29,823 crore. The total restructured assets under Covid relief measures enabled by the Reserve Bank of India were at Rs 1,234 crore, about 4.07% of loan outstanding.
Return on assets (ROA) for Q1 FY23 closed at 2.5% as against 2.2% for Q1 FY22 while return of equity (ROE) was at 12.9% as against 12.2%. Capital adequacy ratio stood at 24.1% (tier I – 17.8%) as compared to 23.5% (tier I – 16.1%).
Lochan said, “This quarter also witnessed our technology, digital & data investments strengthen with the launch of the Sundaram Credit Line — a contactless, paperless offering to our existing customers, delivered digitally end-to-end. Team Sundaram remains focused on ensuring our rightful market share in the segments & geographies we operate in while continuing to remain industry-best in asset quality performance & delivering the Sundaram experience to all our customers.”
The company’s cost to income ratio closed at 33.4% as against 31.5%. T he deposit base stood at Rs 4,129 crore, a net accretion of Rs 26 crore over March 31, 2022.