Sundaram Finance Q4 net profit up 14 per cent at Rs 139 crore

Disbursements for Q4 ended March 31, 2017 witnessed 18 pc growth to Rs 3,413 crore from Rs 2,893 crore registered in the same period of the previous year.

TT Srinivasaraghavan, MD, Sundaram Finance, said “We have achieved a healthy growth in both top and bottom line, notwithstanding the difficult market conditions — impacted as they were, by weak replacement buying, uncertainty surrounding the implementation of BS-IV emission norms and demonetisation. We were able to achieve this thanks to an across the board growth in LCVs, passenger cars and utility vehicles, construction equipment and tractors.” 

Assets under management registered a growth of 16 pc over the previous year and stood at Rs 24,036 crore as on March 31, 2017 (Rs 20,699 crore). The company mobilised fresh deposits of Rs 456.65 crore during the year and ended the year with deposits of Rs 2,411 crore as on March 31, 2017. Deposit renewals stood at around 80 pc.  

“Despite moving to the more stringent 90-day norm for NPA recognition, two years ahead of the regulatory requirement, Sundaram Finance has been able to achieve a significantly lower NPA than last year, reflecting its strong focus on preserving asset quality. The gross and net NPAs as at March 31, 2017, stand reduced to 1.54 pc and 0.55 pc, respectively, as against 2.08 pc and 0.92 pc respectively, in the previous year, by far the best performing port folio amongst its peers. Growth, with quality and profitability, continues to define the company’s approach to business,” he added. 

With construction equipment, tractors and farm equipment projected to register strong growth, the company is upbeat about increasing its presence in these segments. 

In the beginning of the year, the company’s de-risking strategy has helped overcome the sluggishness seen in the medium and heavy commercial vehicles space. “Last year, a lot of the disbursements growth came from LCVs, tractors  and construction Equipment. What is particularly heartening is that it has been quality growth. The contribution of tractors and construction equipment segments went up from 9 per cent to 11 per cent of our business,” he said. 

On demonetisation, he said “Our collections in November were better than the collections in October last year. Also, our highest disbursements for FY17 were recorded in December last year.” 

Noting that the company sees growth opportunities in the construction equipment space driven by the infrastructure push on rural spending and building roads, Srinivasaraghavan said, good monsoon would have a positive impact on rural India, especially in the sales of LCVs, cars and tractors.