Sundaram Finance Q3 Results Review - Operating Performance On Expected Lines; NIMs Maintained: Systematix

Systematix Research Report

Sundaram Finance Ltd. reported net interest income at Rs 4.4 billion, inline with expectation, led by 5% QoQ growth in assets under management (12.6% YoY) and stable net interest margins of 5.4%.

However, lower than expected other income led to a miss in the operating profit. AUM growth of 4.9% QoQ was on account of continued recovery in medium commercial vehicle and heavy commercial vehicle along with demand in passenger vehicle.

Asset quality remained stable, with gross/ net stage-III at 2.4%/ 1.4%.

Restructured assets declined to 2.3% of AUM from 3.0% in Q2. We expect the growth momentum in vehicle portfolio to continue, aided by growth in product categories like construction equipment, tractors, as well as commercial lending.

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