Sundaram Finance's profit in June quarter up by 39%

Chennai, August 4, 2025 – Sundaram Finance Ltd (NSE: SUNDARMFIN) posted a 39% rise (year on year) in standalone net profits (Q1 FY26). This growth is attributed to higher interest income and a steady increase in disbursements. The AUM of the company also grew by 17% and the asset quality also improved.

The stock closed the day, down by 2.37% at Rs 4,460.

Key Financial Highlights – Q1FY26 vs Q1FY25

The company delivered a strong Q1FY26 performance with standalone net profit rising 39% YoY to ₹429 crore. AUM expanded 17% to ₹53,278 crore, while net interest income jumped 25% to ₹781 crore. Asset quality showed slight deterioration, with Gross Stage 3 Assets at 1.91% (up 35 bps), and provision cover declined to 44% from 47%. ROA and ROE improved to 2.91% and 16.70% respectively, indicating stronger profitability. Capital Adequacy Ratio also rose to 20%.

Consolidated Performance

At the consolidated level, Sundaram Finance posted a 9% YoY rise in PAT to ₹475 crore in Q1FY26, driven by improved profitability across business segments. Asset Management PAT rose to ₹45 crore from ₹29 crore, while Royal Sundaram’s PAT nearly doubled to ₹127 crore.

General insurance premium (GWP) also grew from ₹1,114 crore to ₹1,289 crore. Sundaram Home Finance contributed ₹62 crore in PAT, maintaining steady performance despite no disbursement data being shared for the previous year.

Segment Commentary

• Asset Management: Continued strength in equity (80%+ allocation) drove AUM stability and a sharp rise in profit.
• Insurance: Royal Sundaram recorded 16% YoY growth in gross written premium; PAT nearly doubled.
• Home Finance: Disbursements rose 10% but profit was marginally lower due to higher provisioning.

Management Commentary

“Despite a sluggish macro environment, we delivered a 17% growth in AUM and a 39% jump in net profit, showcasing resilience and execution strength,” said Harsha Viji, Executive Vice Chairman.

Rajiv Lochan, Managing Director, added, “Market demand was soft in our core geographies. Yet, we stayed focused on expanding our market share and improving asset quality. With above-normal monsoons and robust procurement, rural sentiment is likely to lift, aiding Q2 growth.”

Strategic Outlook

Sundaram Finance remains committed to balancing growth with asset quality. Management noted Q2 would emphasize improved asset quality while maintaining healthy disbursement margins. ROA of 2.91% and capital adequacy at 20.0% reflect a strong foundation for future growth.

About Sundaram Finance

Sundaram Finance Ltd, founded in 1954, is a leading NBFC in India with a network of 700+ branches, serving over 5 lakh lending customers and 1 lakh depositors. It offers a wide range of financial products, including vehicle and equipment loans, SME funding, and allied services. A part of the TSF Group, it also provides housing finance, insurance, and mutual funds through its subsidiaries, managing over ₹80,000 crore each in assets and AUM.

REF: https://nsearchives.nseindia.com/corporate/SUNDARMFIN_04082025135323_UFR_30062025.pdf

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