We believe SUF's well diversified secured loan mix with strong underwriting practices and comfortable capital position (~CAR 20%) will support operating performance. We maintain our BUY rating with a revised target price of Rs 2350 (based on SOTP valuation).

We upgrade our rating from Hold to Buy with a target price of Rs 1818 (based on SOTP valuation).

Sundaram Finance (SUF) reported mixed performance during Q4FY20. Operating performance of the company was in-line with our estimates while profit was impacted due to higher provisioning. NII for the quarter grew by 5% YoY to Rs 426 cr vs. exact match of our NII estimate. Operating profit growth was at 6% YoY to Rs 281 cr vs. our estimate of Rs 222 cr. Profit for the quarter stood at Rs 131 cr was impacted due to higher provisioning at 172% YoY (Arihant Estimate: Rs 196 cr). Net profit figure for Q4FY19 included an exceptional one-time income of Rs 592 cr on account of sale of...

Sundaram Finance (SUF) report PAT at Rs 269cr, up 74/71% YoY/ QoQ led by NII growth, higher other income on stake sale, improved C-I and lower tax rate. AUM grew at 11% YoY and disbursements saw a decline of 10% YoY mainly driven by a slowdown in the MHCV and car segments.

Given the slowdown in auto volumes, liquidity crisis, the business environment remained tough. However, SFL has been able to outperform its peers on the back of stable asset quality & steady margins, though growth has moderated from a peak of ~40% in FY18 to 11% in Q2FY20. Going ahead, we expect loan growth of 10% CAGR for FY19-21E to | 33871 crore. During H1FY20, disbursement remained flat at | 8246 crore vs. | 8374 crore in H1FY19. Accordingly, AUM growth moderated to 11% YoY to | 30256 crore. On the liability front, strong parentage and business model has...

Sundaram Finance (SUF) clocked in steady AUM growth of ~16/3% YoY/QoQ largely in-line with expectations. Margins were stable despite higher cost of funds being offset by improved yields. Asset quality saw slight deterioration, largely seasonal in nature.

AUM growth was steady at ~16/3% YoY/QoQ largely in-line with expectations, consistent, despite a soft CV cycle. Profitability of Rs 675cr in Q4FY19 included one-time gain of Rs 592cr, resulting from 25.9% stake sell in Royal Sundaram for a consideration of Rs 984cr.

We retain Buy on Sundaram Finance (SUF) and revise our SOTP based TP upwards to Rs2,240. The upward revision to TP follows a) second successive year of 15%+ YoY growth in AuM b) improved profitability (adjusted PAT grew 16% YoY) and c) superior asset quality (GNPA at 1.29%, industry best). Subsidiaries - housing finance, AMC and general insurance remain profitable and contribute meaningful to overall earnings. Commentaries on growth, earnings and asset quality remain encouraging and we have factored the same into our estimates. Valuations...

Sundaram Finance Ltd (SUF), is amongst the oldest vehicle financier, with a track record of strong profitability and growth. In the past couple of years, company has undertaken a conscious strategy of conservatism in tough times, resulting in lower NPA levels vis--vis peers.We initiate SUF with BU..

Set up in 1954, Sundaram Finance Group's services include financing commercial vehicles, passenger cars and construction equipment, as well as specially designed working capital products such as fuel finance and tyre finance. The company is also into home loans, mutual funds, non-life insurance, IT, BPO and distribution of a wide...

The current market price has also been adjusted for demerger on ex-date of February 1, 2018. Accordingly, we have reduced our target price to...

Valuation and view: Q2'18 result beat our estimates on all fronts; we expect momentum therein to continue and have tweaked our estimates to that extent for FY18E/FY19E. In our recent note we had argued for premium valuations for Sundaram Finance, we see that continuing. Retain Buy with SOTP based TP at Rs2,030 (vs. earlier Rs2,000). Value un-locking in the non-financial investments through the demerger process into a separate entity (and subsequently listing of the entity) could add ~10% to our existing SOTP. Key risks: Lower than expected...

Sundaram Finance does not interact with analysts/investors neither discloses any other operating metrics on a quarterly basis. The MHCV industry has now started witnessing deceleration in growth after two strong years. The strong growth in CV industry in the past two years did not translate into growth for Sundaram. Our interaction with other auto NBFC players reveals that large fleet operators who are the prime clients of Sundaram have started...

Sundaram Finance does not interact with investors neither discloses any other operating metrics on a quarterly basis. The MHCV industry has continued to witness a recovery for over a year now, however this has not translated into growth for Sundaram. Our interaction with other auto NBFC players reveals that large fleet operators who are the...