Sundaram Finance Ltd. share price target

Q1 has seen soft disbursement growth (+6% YoY) due to low government spending/ general slowdown in economic activity. We build a growth of 15.5% in FY26, anticipating a pick-up in economic activity in H2. Calculated NIM stood largely stable at 5.2%; we expect a similar trend in FY26 supported by a lower CoF. Asset quality trends have deteriorated in the quarter (GS3/NS3 at 1.91%/ 1.08%) due to payment pressures in the MSME segment; however collection activity remains healthy. We marginally tweak our estimates and...

SUF AUM growth remains stable at 17% YoY vs 17% YoY (FY25) led by lower disbursements. Disbursements grew by 6% YoY (up 6% QoQ) during Q1FY26. Asset quality deteriorated however, continues to remain best-in-class; collections stood at 91%. NIMs (calculated) have improved (up 46bps YoY) led by increase in yields which resulted in strong NII growth (up 28% YoY). PPoP grew by 51% YoY led by higher non-interest income (up 65% YoY). PAT grew by 39% YoY led by higher provisions (up 114% YoY). Thus, RoA improved to 2.9% vs 2.85% QoQ. We have largely retained the estimates and upgraded the stock to BUY rating with TP of Rs.5,530...

We maintain our HOLD recommendation on the stock

Recommendation: We maintain our HOLD recommendation on the stock

We change our recommendation from BUY to HOLD on the stock as the recent run-up in stock pirce leaves limited upside potential.

Recommendation: We maintain our BUY recommendation on the stock.

We maintain our BUY' rating on the stock with a revised target price of Rs 3015/share (3.1x Sep'24 ABV), implying an upside of 18% from the CMP.

Sundaram Finance (Sundaram) reported strong FY23 earnings in key parameters such as standalone AUM growth (up 17% YoY), home finance AUM growth (up 18% YoY), standalone NIMs (5.3%) sustenance in rising interest rate regime and better asset quality (gross stage 3 as on Mar’23 stood at 1.66% vs 2.2% in Mar’22).

Sundaram Finance (Sundaram) has reported strong Q3FY23 earnings in key parameters such as AUM growth (up 5% QoQ), NIMs (5.4%) sustenance in rising interest rate regime and opex moderation (down 1% QoQ despite AUM growth). This performance is contrasting to the moderate management commentary.

We maintain our BUY rating with a revised target price of Rs 2,605/share (based on SOTP valuation), implying an upside of 11.5% from the CMP.

Sundaram Finance’s (Sundaram) management has opined about the incrementally weak business trends in certain key markets in South India along with the outlook of possible ~100bps lower NIMs in medium term, emanating from increasing cost of funds and high competition (from banks) in the MHCV segment.

Sundaram Finance (Sundaram) has reported good Q2FY23 result as quantified by standalone PPOP growth QoQ (as opposed to decline or flat PPOP growth for peers).

We maintain our buy rating with a revised target price of Rs 2,490/share (based on SOTP valuation), implying an upside of 11% from the CMP.

Sundaram Finance’s (Sundaram) Q1FY23 result was highlighted by growth returning in standalone business (31%/138% QoQ/YoY growth in disbursement).