Sundaram Finance Limited

Sundaram Finance Limited is an Indian financial and investment service provider, based in Chennai. The company offers consumer loans, wealth management, commercial finance, investment banking, private equity, treasury advisory, credit cards and infrastructure finance, among others. Sundaram Finance Limited was promoted by Madras Motor Insurance Company a part of the reputed TVS Group. The Company incorporated in 1954 and was made a public limited company in 1961. It went public in 1972.

Shareholding Pattern

-PUBLIC GROUP

-PROMOTER GROUP

Financial Summary

Synopsis of Financials

• 9% growth in profit after tax (PAT) at Rs 308 crore during the quarter ended June 30, 2024 against Rs 281 crore in the corresponding quarter last year.
• Disbursements rose by 7% in Q1 FY25 at Rs 6,908 crore from Rs 6,489 crore during the year-ago quarter.
• Gross and net NPA, as per RBI’s asset classification norms for NBFCs, are 2.21% and 1.41%, respectively.

Final Outlook

Sundaram Finance is a strong and reliable company within India’s financial services sector, known for providing various loans, asset management, and insurance products. Its stock has shown impressive long-term performance, with a five-year total shareholder return (TSR) of 248%. The company is well-regarded, benefiting from consistent dividends, and has delivered a 75% return over the past year, signaling solid momentum. Sundaram Finance’s current price-to-earnings (P/E) ratio stands at 37.45, which is notably higher than the industry average of 24.12, indicating it is trading at a premium.

While the stock price has appreciated significantly, with a recent price around ₹5,046, analysts have pointed out that its earnings growth has not kept pace with its share price growth, which may suggest overvaluation risks.