Sundaram Finance Q3 PAT at Rs202cr

7 Feb 2022 , 03:14 PM

Non Banking Finance Company Sundaram Finance recorded a disbursements growth of 13% to Rs. 9,524crores for Apr — Dec 2021 as compared to Rs. 8,437crores registered in the corresponding period of the previous year. Gross stage 3 assets as on December 31, 2021, stood at 3.39% with provision cover of 39% as against 3.45% as on September 30, 2021, with provision cover of 39%. Profit after tax for Apr — Dec 21 went up to Rs. 605crores as against Rs. 600crores in Apr — Dec 2020. 

The Board has declared an interim dividend of Rs. 10 per share.

Anticipate Broad Based Recovery in Q4
Harsha Viji, Executive Vice Chairman, Sundaram Finance Ltd said “Overall economic activity improved in Q3 FY22 and demand remained robust across segments. However, supply side issues, including the global semiconductor chip shortage, caused a decline in industry volumes across multiple asset classes — tractor & farm equipment, construction equipment, passenger vehicles and small commercial vehicles. Medium and Heavy Commercial Vehicles witnessed robust growth albeit on a smaller base. We anticipate broad-based recovery across all segments in Q4.”

Well Poised to capture growth opportunities in Q4
Commenting on the prospects in Q4, Rajiv Lochan, Managing Director, Sundaram Finance Ltd., said “While the Omicron variant was highly infectious, it has been relatively mild on hospitalisations and mortality, causing a rapid flattening of the curve in Wave 3 of the Covid pandemic. We expect Q4 to see recovery to normalcy which will enable pick-up in activity and credit off take. We are well-poised to capture growth opportunities across all asset classes in Q4.”

STANDALONE PERFORMANCE HIGHLIGHTS FOR Q3&9M FY22

• Disbursements for Q3FY22 was at Rs.3,843 crores as compared to Rs.4,334croresin Q3FY21. Adjusting for the pandemic induced ECLGS scheme, disbursements in Q3 FY22 grew 3% over Q3 FY21. Disbursements for Apr — Dec 21 recorded a growth of 13% to Rs.9,524 crores as against Rs.8,437crores in Apr — Dec 20.Adjusting for the pandemic induced ECLGS scheme, core business disbursements grew 26% in 9MFY22 compared to 9MFY21.
• The assets under management stood at Rs.29,796crores as on 31st December 2021 as against Rs. 29,811crores as on 30thSeptember 2021.
• Pursuant to RBI’s notification on Resolution Framework 2.0 related of advances to customers, assets totallingRs.781crores, about 2.68% of loan outstanding, were restructured during Apr — Dec 2021. The total restructured assets wereRs.2,089crores, about 7.16% of loan outstanding, as on 31st December 2021.
• Gross stage 3 assets as on 31st December 2021 stood at 3.39% with provision cover of 39% when compared to3.45% with 39% provision cover as of 30thSeptember 2021.Net stage 3assets as of 31st December 2021 closed at 2.09% as against 2.12% as of 30thSeptember 2021.
• With a view to ensuring uniformity in the implementation of IRACP norms across all lending institutions, RBI vide its circular dated 12th November 2021 – “Prudential norms on Income Recognition, Asset Classification and Provisioning (IRACP) pertaining to Advances” has tightened the NPA norms for NBFCs with immediate effect.  The Company has taken steps to comply with the changes for regulatory reporting, as applicable.  The Company continues to prepare the financial results in accordance with the applicable Ind-AS guidelines and maintains adequate ECL provisions as per Ind AS 109.
• Covid-impacted customer segments, in particular staff & route bus, tourist bus and school bus operators, tourist taxi operators and small market load CV operators are still struggling through the process of recovery based on the pandemic’s evolution and consequent actions to contain it. As per RBI’s circular of November 12, 2021, gross NPA was 7.71%, of which 4.06% was below 90 days past due as of Dec 31, 2021. Excluding this, gross NPA would have been 3.65% as against 3.85% as of Sep 30, 2021. The Company’s underlying business risk has not undergone any material change.
• Cost to income ratio closed at 30.13%in Apr — Dec 2021 as against 30.14% in Apr — Dec 2020.
• The deposit base stood at Rs.4,117crores as on 31st December 2021, a net accretion of Rs.97croresover31st March 2021.
• Profit after tax for Apr — Dec 2021 at Rs.605crores as against Rs.600crores in Apr — Dec 2020. Profit after tax for Q3 FY22 closed at Rs.202crores.
• Return on assets (ROA) for Apr — Dec 2021closed at 2.3% as against 2.2% for Apr — Dec 2020. Return of equity (ROE) was at 12.5% for Apr — Dec 2021 as against 13.7% for Apr — Dec 2020. If we exclude investments in subsidiaries and group companies, core ROE was at 16.2% for Apr — Dec 2021 as against 19.2% for Apr — Dec 2020.
• Capital Adequacy Ratio stood at 23.6% (Tier I — 16.7%) as of 31stDecember 2021compared to 19.8% (Tier I — 14.2%) as of 31st December 2020.
• The Company has declared an interim dividend of Rs. 10 per share (100%).

CONSOLIDATED PERFORMANCE HIGHLIGHTS FOR Q3&9MFY22

The consolidated results of SFL include the results of its standalone subsidiaries Sundaram Home Finance, Sundaram Asset Management and joint venture company Royal Sundaram General Insurance.

• The assets under management (AUM) in our lending (Sundaram Finance & Sundaram Home) and general insurance businesses stood at Rs.46,349 crores as on 31st December 2021as against Rs.47,297croresas on 31st December 2020. The assets under management of our asset management business stood at Rs. 46,355crores as on 31st December 2021 as against Rs.39,803 crores as on 31st December 2020.
• Consolidated profit after tax stood at Rs.833crores for the nine months ended 31st December 2021 compared to profit after tax of Rs.895crores for the nine months ended 31st December 2020.

GROUP COMPANY PERFORMANCE HIGHLIGHTS
Our group companies continued to perform well in difficult business conditions.

• The asset management business closed the nine months ended 31st December 2021 with assets under management of Rs. 46,355crores (over 80 % in equity) and consolidated profits from the asset management businesses grew from Rs. 31crores in Apr — Dec 2020 to Rs. 73crores in Apr — Dec 2021, an increase of 135%. On 31st December 2021, the asset management business completed the acquisition of Principal Asset Management Private Limited pursuant to approvals by the Competition Commission of India and SEBI. Consequently, assets under management as on 1stJanuary2022 amounted to Rs. 55,859crores, an increase of 21%.
• Royal Sundaram General Insurance, our joint venture with Ageas of Belgium, delivered Gross Written Premium of Rs. 2,147crores in Apr — Dec 2021, a 3% increase over Rs. 2,081crores in Apr — Dec 2020. The profit for Apr — Dec 21 was at Rs. 189crores as against Rs. 289crores in Apr — Dec 2020, a decrease due to lower motor claims in Apr — Dec 2020 due to more extensive nation-wide lockdowns.
• Disbursements of Sundaram Home Finance were up by 91% to Rs. 1,517crores in Apr — Dec 2021.  The profit for Apr — Dec 2021 was Rs. 115crores as against Rs. 155crores in Apr — Dec 2020.