Sundaram Finance Stock Soars 10% After Strong Q3 Results
Shares of Sundaram Finance Ltd, a leading non-banking financial company (NBFC) based in Chennai, surged nearly 10% following the release of its Q3FY25 results. Investors cheered the company’s robust disbursements, steady asset growth, and solid operational performance, leading to a strong rally in its stock price.
Stock Price Movement
Sundaram Finance, which boasts a market capitalization of ₹50,977.23 crore, saw its stock hit an intraday high of ₹4,721 per share before closing at ₹4,637—7.6% higher than the previous close of ₹4,312. The stock has been a strong performer in the long run, generating a 25% return in the past year and an impressive 173% return over the last five years.
Q3FY25 Financial Performance
The company posted a 20% YoY growth in total revenue from operations, rising from ₹1,821 crore in Q3FY24 to ₹2,190 crore in Q3FY25. On a sequential basis, revenue grew 5% from ₹2,085 crore in Q2FY25.
However, net profit declined 10% YoY, dropping from ₹506 crore in Q3FY24 to ₹455 crore in Q3FY25. Despite the yearly decline, quarterly profits saw a 4.4% rise from ₹436 crore in Q2FY25.
One of the highlights of the earnings report was the highest-ever 9-month (9M) disbursements of ₹21,532 crore, reflecting an 8% YoY increase compared to ₹19,954 crore in 9MFY24. The company’s assets under management (AUM) surged 19% from ₹42,172 crore in Q3FY24 to ₹50,199 crore in Q3FY25, showcasing strong business expansion.
Additionally, the company’s net worth grew 26% YoY from ₹8,521 crore to ₹10,742 crore, further strengthening its financial position.
Funding Mix Breakdown
Sundaram Finance maintains a diversified funding base, with the following composition as of Q3FY25:
| Funding Source | Percentage Contribution |
|---|---|
| Debentures | 29.7% |
| Bank Borrowings | 35.6% |
| Securitization | 10.7% |
| Deposits | 13.6% |
| Commercial Paper | 10.4% |
The total funds stood at ₹46,386 crore, ensuring adequate liquidity and financial flexibility for future growth.
Management Commentary
Harsha Viji, Executive Vice Chairman of Sundaram Finance, expressed optimism about the company’s performance, stating:
“Team Sundaram has delivered a terrific Q3 with 19% growth in AUM to ₹50,199 crores, improving asset quality with net stage 3 at 0.97% vs 1.02% last year, and profits from operations growing 22% year-on-year. Our Group companies in asset management, general insurance, and home finance have continued their trajectory from FY24 and recorded strong results.”
The company’s focus on improving asset quality and maintaining steady operational growth has contributed to its strong market standing.
Key Financial Ratios & Stock Performance
| Metric | Value |
|---|---|
| Market Cap | ₹51,749 Cr. |
| Current Price | ₹4,653 |
| 52-Week High/Low | ₹5,536 / ₹3,570 |
| Stock P/E | 31.7 |
| Book Value | ₹1,126 |
| Dividend Yield | 0.65% |
| Return on Capital Employed (ROCE) | 9.21% |
| Return on Equity (ROE) | 14.2% |
| Debt to Equity Ratio | 4.50 |
| Industry P/E | 20.3 |
| Total Debt | ₹56,256 Cr. |
| PEG Ratio | 2.72 |
| Intrinsic Value | ₹1,795 |
| Graham Number | ₹1,907 |
| Piotroski Score | 6.00 |
About Sundaram Finance Ltd
Founded in 1954, Sundaram Finance has established itself as a prominent NBFC, offering a diverse range of financial services. The company, through its subsidiaries and group firms, provides home finance, loans against property, mutual funds, investment management solutions, and general insurance products. It has an extensive network of over 700 branches and caters to a customer base of nearly 5 lakh lending customers and 1.1 lakh depositors.
Conclusion
Sundaram Finance’s strong Q3FY25 performance has reaffirmed its position as a key player in the NBFC sector. Despite a slight dip in net profits, its consistent revenue growth, record-high disbursements, expanding AUM, and improved asset quality have instilled confidence among investors. With a robust balance sheet and steady market performance, the company remains well-positioned for continued growth in the coming quarters.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.