Shares of a midcap NBFC gained 12 percent to reach an intraday high of ₹ 2980.00 apiece on the National Stock Exchange (NSE) after the company announced its result. At 02:22 PM, its shares were trading at ₹ 2866.95 apiece.
According to an exchange filing, Sundaram Finance reported the highest-ever disbursements of ₹ 6,489 crores, 32 percent over Q1FY23. Its assets under management (AUM) grew 22 percent to ₹ 37,255 crores and net profit grew 25 percent to ₹ 281.00 crores.
The company witnessed a continued improvement in asset quality with Gross Stage 3 assets at 1.90 percent (2.51 percent as of June 30, 2022) and Net Stage 3 assets at 1.00 percent (1.30 percent as of June 30, 2022). Disbursements for Q1FY24 up by 32 percent over Q1 FY23 and profits after tax for Q1FY24 up by 25 percent to ₹ 281 crores from ₹ 226 crores in Q1 FY23.
The company’s return on assets (ROA) came in at 2.7 percent, compared to 2.5 percent in the corresponding quarter of the last year (Q1FY23) and the capital adequacy ratio came in at 21.4 percent, compared to 24.1 percent in Q1FY23.
Sundaram Finance is a registered deposit-taking NBFC engaged in retail finance across multiple domains like vehicle finance, home finance, mutual funds, general insurance and financial service distribution.
With a market capitalization of ₹ 29,561 crores, Sundaram Finance is a mid-cap company. It has a low return on equity of 7.82 percent and a dividend of 1.01 percent. Its shares were trading at a price-to-earnings ratio (P/E) of 20.42, which is higher than the industry P/E of 17.49, indicating that the stock might be overvalued, compared to its peers.
The company’s promoters have a 38.49 percent stake in it, followed by retail investors with 37.13 percent, mutual funds with 12.98 percent, foreign institutions with 7.78 percent and other domestic institutions with 3.62 percent.
Written by Simran Bafna
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