Sundaram Finance sees opportunities in construction, LCV, tractor business

Non-banking finance company Sundaram Finance is looking at "significant opportunities" in the construction equipment, light commercial vehicle and tractor market, a top official said.

Addressing shareholders at the annual general body meeting here recently, the company chairman S Viji said, "while concentrating on our core markets and product segments, we see significant opportunities in the rapidly growing construction equipment segment, as also the LCV and tractor segments."

He referred to a report by Society of Indian Automobile Manufacturers Association which indicated that growth of commercial vehicle sales was expected to be at 10-12 per cent in 2018-19.

Also, the report said sales of passenger vehicles were expected to grow at 8-10 per cent, utility vehicles at 14-15 per cent and cars at 8-9 per cent.

"Rising interest rates and intensifying competition are likely to exert pressure on margins. We expect to manage this through financing an appropriate mix of higher and lower yielding assets while ensuring that asset quality continues to remain best in class," he said.

Referring to a CRISIL report that sales of tractors were projected to increase by 11-13 per cent with a normal monsoon and increased government support, he said diesel prices continue to remain 'stubbornly high' and coupled with higher interest rates could prove a dampener to transport operator's viability.

With inflation up and liquidity tightening, he said interest rates have already shown an upward trend in the first quarter of the current financial year.

Sundaram Finance, Managing director, TT Srinivasaraghavan said its disbursements grew by 18 per cent last year and loan book by close to 20 per cent.

"Sundaram Finance has always followed a policy of prudent growth. We embrace a philosophy which combines growth, quality and profitability. We remain rooted in our ideals of protecting and enhancing shareholder value and will continue to do so," he said.