The Board of Directors of Sundaram Finance Ltd. (SFL) approved the unaudited standalone and consolidated financial results for the half year ended Sep 30, 2024, at its meeting held on Nov 04, 2024, in Chennai.
“Team Sundaram has delivered a balanced H1FY25 despite lower-than-expected economic activity in the half year. Assets under management grew by 20% to Rs. 48,058 crores compared to the prior year period. Net stage 3 assets closed at 0.89% and profit after tax for H1FY25 was at Rs. 648 crores. Our Group companies in asset management, general insurance and home finance have continued their trajectory from FY24 and recorded strong results. We continue to rely on our time-tested approach of steady and sustainable growth with best-in-class asset quality and consistent profitability,” said Harsha Viji, Executive Vice Chairman.
Disbursements for H1FY25 recorded a growth of 3% over H1FY24. Gross stage 3 assets improved over the previous year. Gross stage 3 assets as on September 30, 2024, stood at 1.62% with provision cover of 45% as against 1.86% as on September 30, 2023, with provision cover of 42%. Core operations performed strongly with profit from operations up by 23% in H1FY25. Profits after tax was flat at Rs. 648 crores during H1FY25 and H1FY24 primarily due to a shift in the timing of dividend income last year. Dividend income was at Rs. 43 crores during H1FY25 as against Rs. 181 crores in H1FY24. Return on assets closed at 2.50% in H1FY25 as against 2.95% for H1FY24 and capital adequacy at 20.0% remains quite comfortable.
“Economic activity in Q2 was well below expectations with the monsoons disrupting consumption and government spending being slower post the general elections. The tepid economic activity was exacerbated by growing concerns on asset quality in the microfinance and unsecured lending sectors. With no exposure in these segments, we delivered a well-balanced performance in a tough operating environment, recording operating profit growth of 23%. Looking ahead, we remain cautiously optimistic of a recovery in economic activity in H2 as domestic consumption and private sector capital expenditure resume and the central government’s infrastructure spend and policy agenda gather pace. Team Sundaram will continue to remain sharply focused on delivering the Sundaram experience to our customers, our people and all stakeholders,” said Rajiv Lochan, Managing Director.
STANDALONE PERFORMANCE HIGHLIGHTS FOR H1FY25
- Disbursements for H1FY25 grew by 3% to Rs. 13,768 crores as compared to Rs. 13,430 crores registered in H1FY24.
- The assets under management grew by 20% to Rs. 48,058 crores as on 30th September 2024 as against Rs. 40,106 crores as on 30th September 2023.
- Net interest income grew 19.4% to Rs. 1,304 crores in H1FY25 from Rs. 1,092 crores in H1FY24.
- Gross stage 3 as on 30th September 2024 stood at 1.62% with 45% provision cover as against 1.86% with provision cover of 42% as on 30th September 2023. Net stage 3 as on 30th September 2024 closed at 0.89% as against 1.08% as on 30th September 2023.
- The Gross and Net NPA, as per RBI’s asset classification norms for NBFCs, are 2.39% and 1.55% respectively as against 2.89% and 2.06% as of 30th September 2023.
- Profit from operations increased by 23% in H1FY25 as compared to H1FY24.
- Cost to income ratio closed at 32.27% in H1FY25 as against 35.18% in H1FY24.
- The dividend income was lower during H1FY25 at Rs. 43 crores as against Rs. 181 crores in H1FY24.
- Profit after tax was flat at Rs. 648 crores during H1FY25 and H1FY24.
- Return on assets (ROA) for H1FY25 closed at 2.50% as against 2.95% for H1FY24. Return on equity (ROE) was at 14.2% for H1FY25 as against 16.2% for H1FY24.
- Capital Adequacy Ratio stood at 20.0% (Tier I –16.4%) as of 30th September 2024 compared to 19.9% (Tier I – 15.9%) as of 30th September 2023.
CONSOLIDATED PERFORMANCE HIGHLIGHTS FOR H1FY25
The consolidated results of SFL include the results of its standalone subsidiaries Sundaram Home Finance, Sundaram Asset Management and joint venture company Royal Sundaram General Insurance.
- The assets under management (AUM) in our lending and general insurance businesses stood at Rs. 72,541 crores as on 30th September 2024 as against Rs. 60,578 crores as on 30th September 2023, a growth of 20%. The assets under management of our asset management business stood at Rs. 76,845 crores as on 30th September 2024 as against Rs. 61,884 crores as on 30th September 2023, a growth of 24%.
- Profit after tax for H1FY25 grew by 18% to Rs. 871 crores as compared to Rs. 741 crores in H1FY24.
GROUP COMPANY PERFORMANCE HIGHLIGHTS
Our group companies continued to perform well.
- The asset management business closed the half year ended 30th September 2024 with assets under management of Rs. 76,845 crores (around 85% in equity) and consolidated profits from the asset management businesses were at Rs. 68 crores as against Rs. 49 crores in H1FY24.
- Royal Sundaram reported a Gross Written Premium (GWP) of Rs. 2,053 crores as compared to Rs. 1,818 crores in the corresponding period of the previous year, representing a growth of 13%. The Company reported a profit after tax of Rs. 126 crores for H1FY25 as against a profit of Rs. 145 crores in H1FY24.
- Sundaram Home Finance continued to grow strongly with disbursements up by 26% to Rs. 2,896 crores in H1FY25. The profit for H1FY25 was Rs. 111 crores, as against Rs. 117 crores in H1FY24.
