Sundaram Finance Ltd. share price target

We upgrade our rating from HOLD to BUY with a target price of Rs 2,195/share (based on SOTP valuation), implying an upside of 20% from the CMP.

We maintain a BUY rating with an unchanged TP of Rs.2,830. Sundaram witnessed sharp improvement in its disbursements, further reiterating our stance on the revival in the CV cycle. We expect the growth momentum to accelerate further given the positive high frequency indicators (Oct 21 GST collections at second highest), pick-up in CV sales etc that hint to strong tailwinds. While restructuring came in higher at 7.17% (prudent approach being implemented), Stage 3 remains comfortable (declined QoQ) and best-inclass reflecting strong underwriting. AUM growth acceleration, improving credit costs, and margin expansion augur well for core RoEs at 17-18%. We...

We initiate coverage on Sundaram Finance (SUF), a thinly covered stock with best-in-class asset quality and healthy earnings profile with a BUY rating and TP of Rs.2,830. In what is unquestionably unique and a mark of superiority among lenders, SUF has managed its own business growth and invested in several profitable subsidiaries without dilution for nearly 50 years. Further, deliberately calibrated but unspectacular growth resulting in stable asset quality across CV cycles has been its defining characteristic. From multiple checks, we conclude that cyclical tailwinds in the CV industry bode well for SUF, buttressed as it is by steady...

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 rating at Hold with a target price of Rs 2,655 (based on SOTP valuation).

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...