Sundaram Finance Posts Strong Q1 FY25 with 23% AUM Growth and 9% PAT Increase
Sundaram Finance logs disbursements of Rs. 6,908 crores, 7% over Q1FY24; AUM grows 23% to Rs. 45,671 crores
Net profit for Q1FY25 up by 9% at Rs. 308 crores
Profits from Operations up by 22% in Q1FY25
Continued improvement in asset quality with Gross Stage 3 assets at 1.56% (1.90% as of June 30, 2023) and Net Stage 3 assets at 0.84% (1.00% as of June 30, 2023)
ROA at 2.38% for Q1FY25 (2.68% for Q1FY24)
Capital Adequacy Ratio at 19.3% (21.4% for Q1FY24)
The Board of Directors of Sundaram Finance Ltd. (SFL) approved the unaudited standalone and consolidated financial results for the quarter ended Jun 30, 2024, at its meeting held on Aug 05, 2024, in Chennai.
“Team Sundaram has delivered a strong Q1FY25 despite lower-than-expected economic activity in the quarter. Assets under management grew by 23% to a new high of Rs. 45,671 crores, net stage 3 assets closed at 0.84% and profit after tax recorded a 9% growth to Rs. 308 crores over the prior year period. 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 Q1FY25 recorded a growth of 7% over Q1FY24. Net interest income rose 20% in Q1FY25 as compared to Q1FY24. Gross stage 3 assets improved substantially over the previous year. Gross stage 3 assets as on June 30, 2024, stood at 1.56% with provision cover of 47% as against 1.90% as on June 30, 2023, with provision cover of 48%. The profit from operations is up by 22% in Q1FY25. Profit after tax at Rs. 308 crores registered an increase of 9% in Q1FY25 as against Rs. 281 crores in Q1FY24. The dividend income was lower during Q1FY25 at Rs. 18 Cr as against Rs. 51 Cr in Q1FY24. Return on assets at 2.38% as against 2.68% for Q1FY24 and capital adequacy at 19.3% remains quite comfortable to support planned growth.
“As we expected, economic activity in Q1 was disrupted by the general elections as well as a particularly hot summer. We delivered a well-balanced GQP performance in a tough operating environment. Looking ahead, we expect seamless continuity in the policy agenda of the government at the centre and that economic activity will pick up through the rest of the year. 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 Q1FY25
· Disbursements for Q1FY25 recorded a growth of 7% to Rs. 6,908 crores as compared to Rs. 6,489 crores registered in Q1FY24.
· The assets under management grew by 23% to Rs. 45,671 crores as on 30th June 2024 as against Rs.37,255 crores as on 30th June 2023.
· Net interest income rose 20% in Q1FY25 as compared to Q1FY24. Profit from operations increased by 22% in Q1FY25 as compared to Q1FY24.
· Gross stage 3 as on 30th June 2024 stood at 1.56% with 47% provision cover as against 1.90% with provision cover of 48% as on 30th June 2023. Net stage 3 as on 30th June 2024 closed at 0.84% as against 1.00% as on 30th June 2023.
· The Gross and Net NPA, as per RBI’s asset classification norms for NBFCs, are 2.21% and 1.41% respectively as against 2.96% and 2.00% as of 30th June 2023.
· Cost to income ratio closed at 32.90% in Q1FY25 as against 35.18% in Q1FY24.
· Profit after tax registered a 9% rise in Q1FY25, with net profit at Rs. 308 crores. The company had registered a net profit of Rs. 281 crores in Q1FY24.
· Return on assets (ROA) for Q1FY25 closed at 2.38% as against 2.68% for Q1FY24. Return on equity (ROE) was at 13.6% for Q1FY25 as against 14.3% for Q1FY24.
· Capital Adequacy Ratio stood at 19.3% (Tier I –16.2%) as of 30th June 2024 compared to 21.4% (Tier I – 17.0%) as of 30th June 2023.
CONSOLIDATED PERFORMANCE HIGHLIGHTS FOR Q1FY25
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. 69,234 crores as on 30th June 2024 as against Rs. 57,150 crores as on 30th June 2023, a growth of 21%. The assets under management of our asset management business stood at Rs. 80,565 crores as on 30th June 2024 as against Rs. 59,862 crores as on 30th June 2023, a growth of 35%.
· Profit after tax for Q1FY25 grew by 16% to Rs. 435 crores as compared to Rs. 375 crores in Q1FY24.
GROUP COMPANY PERFORMANCE HIGHLIGHTS
Our group companies continued to perform well.
· The asset management business closed the quarter ended 30th June 2024 with assets under management of Rs. 80,565 crores (over 85% in equity) and consolidated profits from the asset management businesses was at Rs. 29 crores as against Rs. 24 crores in Q1FY24.
· Royal Sundaram reported a Gross Written Premium (GWP) of Rs. 1,114 crores as compared to Rs. 908 crores in the corresponding period of the previous year, representing a growth of 23%. The Company reported a profit after tax of Rs. 65 crores for Q1FY25 as against a profit of Rs. 95 crores in Q1FY24.
· Sundaram Home Finance continued to grow strongly with disbursements up by 24% to Rs.1,353 crores in Q1FY25. The profit for Q1FY25 was Rs. 66 crores, up by 16% as against Rs.57 crores in Q1FY24.