Sundaram Finance Ltd. – Audited standalone & consolidated financial results for the quarter and year ended March 31st, 2024

Sundaram Finance Ltd. – Audited standalone & consolidated financial results for the quarter and year ended March 31st, 2024

The Board of Directors of Sundaram Finance Ltd. (SFL) approved the audited standalone and consolidated financial results for the year ended March 31, 2024, at its meeting held on May 24, 2024, in Chennai.

“Team Sundaram has delivered a strong FY24 despite lower-than-expected economic activity in the quarter. Assets under management grew by 27% to a new high of Rs. 43,987 crores, net stage 3 assets closed at 0.63% and profit after tax recorded a 23% growth to Rs. 1,334 crores (excluding exceptional item) over the prior year period. Our Group companies in asset management, general insurance and home finance have continued their trajectory from FY23 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 FY24 recorded a growth of 25% over FY23 with all asset classes and geographies witnessing significant growth. Gross stage 3 assets improved substantially over the previous year. Gross stage 3 assets as on March 31, 2024, stood at 1.26% with provision cover of 50% as against 1.66% as on March 31, 2023, with provision cover of 49%. Profit after tax at Rs. 1,334 crores registered an increase of 23% (excluding exceptional item) in FY24 as against Rs. 1,088 crores in FY23. Return on assets at 3.18% as against 2.84% for FY23 and capital adequacy at 20.5% remains quite comfortable to support planned growth.

“Q4 witnessed sluggish demand in the automotive sector although pre-election impetus boosted infrastructure and construction activity. We improved market share and ensured best-in-class asset quality in a tough operating environment. Looking ahead, while medium term prospects for the Indian economy look promising, we expect FY25 to be a tale of two halves – H1 impacted by the general elections currently underway and normal monsoons forecasted and H2 witnessing a revival in demand and private investment. Team Sundaram will continue to take a through-cycle view and sharply focus on delivering the Sundaram experience to our customers, our people and all stakeholders,” said Rajiv Lochan, Managing Director.

STANDALONE PERFORMANCE HIGHLIGHTS FOR FY24

· Disbursements for FY24 recorded a growth of 25% to Rs. 26,163 crores as compared to Rs. 20,966 crores registered in FY23. Disbursements for Q4FY24 recorded a growth of 18% to Rs. 6,209 crores as compared to Rs. 5,259 crores in Q4FY23.

· The assets under management grew by 27% to Rs. 43,987 crores as on 31st March 2024 as against Rs.34,552 crores as on 31st March 2023.

· Net interest income rose 17% in FY24 as compared to FY23. For the quarter ending March 31, 2024, net interest income rose 21% over the corresponding quarter in FY23.

· The total restructured assets under Covid relief measures enabled by the Reserve Bank of India were at Rs. 260 crores, about 0.6% of loan outstanding, as on 31st March 2024.

· Gross stage 3 as on 31st March 2024 stood at 1.26% with 50% provision cover as against 1.66% with provision cover of 49% as on 31st March 2023. Net stage 3 as on 31st March 2024 closed at 0.63% as against 0.86% as on 31st March 2023.

· The Gross and Net NPA, as per RBI’s new asset classification norms for NBFCs, are 1.98% and 1.25% respectively as against 3.00% and 2.10% as of 31st March 2023.

· Cost to income ratio closed at 34.69% in FY24 as against 34.26% in FY23. The cost-to-income ratio for Q4FY24 closed at 33.46% as against 33.02% for Q4FY23.

· Profit after tax registered a 23% rise in FY24, with net profit at Rs. 1,334 crores (excluding exceptional item). The company had registered a net profit of Rs. 1,088 crores in FY23. Profit after tax registered a 22% increase in Q4FY24 (excluding exceptional item), with net profit at Rs. 386 crores as compared to Rs. 316 crores in Q4FY23.

· During the year, the Company transferred 79,73,529 equity shares of Rs. 5/- each held in Sundaram Finance Holdings Limited (SFHL), representing 3.59% stake, resulting in a profit of Rs. 134 crores. SFHL has ceased to be a subsidiary of the company. The Company has decided to recognize this investment at Fair Value through Other Comprehensive Income as per IND AS 109.

· Provision of Rs. 70 crores was made in respect of investments in Alternate Investment Funds (AIF) pursuant to RBI circular dated 27th March 2024.

· Return on assets (ROA) for FY24 closed at 3.18% as against 2.84% for FY23. Return on equity (ROE) was at 17.5% for FY24 as against 14.9% for FY23.

· Capital Adequacy Ratio stood at 20.5% (Tier I –16.8%) as of 31st March 2024 compared to 22.8% (Tier I – 17.7%) as of 31st March 2023.

· The Company has declared a final dividend of Rs. 16/- per share (160%).

CONSOLIDATED PERFORMANCE HIGHLIGHTS FOR FY24

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. 66,472 crores as on 31st March 2024 as against Rs. 53,406 crores as on 31st March 2023. The assets under management of our asset management business stood at Rs. 70,883 crores as on 31st March 2024 as against Rs. 54,719 crores as on 31st March 2023.

· Profit after tax for FY24 grew by 8% to Rs. 1,436 crores as compared to Rs. 1,328 crores in FY23.

GROUP COMPANY PERFORMANCE HIGHLIGHTS

Our group companies continued to perform well.

· The asset management business closed the year ended 31st March 2024 with assets under management of Rs. 70,883 crores (over 85% in equity) and consolidated profits from the asset management businesses was at Rs. 112 crores as against Rs. 85 crores in FY23.

· Royal Sundaram reported a Gross Written Premium (GWP) of Rs. 3,825 crores as compared to Rs. 3,517 crores in the previous year, representing a growth of 9%. The Company reported a profit after tax of Rs. 169 crores for FY24 as against a profit of Rs. 44 crores in FY23. Profit after tax during FY24 includes net gain of Rs. 71 crores on Fair Value of Equity investments as against net loss on Fair Value of Equity investments of Rs. 105 crores in FY23.

· Sundaram Home Finance continued to grow strongly with disbursements up by 29% to Rs.5,029 crores in FY24. The profit for FY24 was Rs. 236 crores, up by 9% as against Rs.215 crores in FY23.