Sundaram Finance Q4 profit up 34%

Non-banking finance company Sundaram Finance has reported a 34% growth in net profit during the quarter ended March 31, 2016, at Rs 122 crore as against Rs 91 crore, a year ago. Disbursements during the quarter rose by 12% to Rs 2,893 crore from Rs 2,594 crore, a year ago.

Assets under management crossed Rs 20,000 crore and stood at Rs 20,699 crore as on March 31, 2016. Net NPA stood at 0.92% as on March 31, 2016.

TT Srinivasaraghavan, managing director, Sundaram Finance said that after three challenging years and an extended slowdown, both for the economy and the CV sector, the tide seems to be finally turning.

The asset quality has been at its best in fiscal 2016, compared with the last four years and it had a positive effect on provisioning. "We have been able to achieve the best in class net NPA of sub 1%, also considering that we have moved to the 90 day norm in Fiscal 2016, two years ahead of the regulatory requirement. This helps in terms of stating our position on asset quality. It also gives us the required headroom to adjust to regulatory requirement," he said.

There has been an uptrend in the second half of last year and the M&HCV space saw some good growth.

The operator's viability has been improving because of stable diesel prices. The overall scenario is definitely better than what it was a year ago. The key propeller to disbursement growth in fiscal 2016 was a 35% growth, which the company achieved in the M&HCV space. LCV and ICV are also expanding for intra city and inter-city transport. The need for hub and spoke distribution will increase.

Sundaram Finance has gained 1% market share in the CV space in the last six months.

On outlook for fiscal 2017, Srinivasaraghavan said that the trend is upbeat and positive, macro-economic indicators are sound, inflation is under control and the interest rates have come down.

“So the outlook is generally positive. Diesel prices may remain at current levels. And the general belief is that oil prices will stay benign most of this year. That is a big positive. "We are hopeful of a big push in infrastructure spend and if the prediction of a positive monsoon turns out to be true, there is definitely room for optimism this year. If both of these happen, we can aspire for a repeat of FY16 performance."