Sundaram Finance, the Chennai-based non-banking finance company, has reported an 81 per cent increase in standalone net profit to Rs 98 crore for the fourth quarter ended March 31, 2011, as against Rs 54 crore in the corresponding quarter of the previous year.
Revenue increased by 14 per cent to Rs 400 crore (Rs 352 crore).
For the year ended March 31, 2011, the company reported a 28 per cent increase in net profit to Rs 258 crore (Rs 201 crore). The net profit is not comparable with those of the previous year, which included an exceptional item, the company said.
Disbursement for the financial year ended March 31, 2011, increased by 28 per cent to Rs 7,478 crore (Rs 5,834 crore). “It was a pretty good year with both the top-line and bottom-line growth accompanied by excellent asset quality,” Mr T.T. Srinivasaraghavan, Managing Director, Sundaram Finance, told newspersons.
In the standalone accounts, ‘other income' includes a special dividend of Rs 38.85 crore received from a subsidiary company. However, the company's ‘growth trajectory' could slow down in the current fiscal even as the automotive industry is showing the first signs of a slowdown, according to Mr T. T. Srinivasaraghavan.
The company's board has recommended a final dividend of Rs 7 per share. This, along with the interim dividend of Rs 7 per share, takes the total dividend for the year to Rs 14 a share.
Slowdown
Mr Srinivasaraghavan said there is a slowdown in both the commercial vehicle and passenger car segments, as also in the utility vehicle segment. These segments will see a lower growth trajectory during the year.
“Since our dependence is high on all these industries our growth trajectory too will reflect the slowdown.
“There will be growth this year, but at a lower trajectory. We are not trying to win against the risks,” he said when asked whether there will be any major shift in the company's business strategy.
Sundaram Finance is heavily dependent on the automotive industry, which accounted for nearly 97 per cent of its vehicle finance last year.
“Our fortunes are very closely linked to the automotive industry. While we expect modest top-line growth this year, we are confident of maintaining profitability at a healthy level,” he was quoted in the press release.
NPA
The net non-performing asset (NPA) as on March 31, 2011, stood at an ‘industry best' of 0.20 per cent as against 0.45 per cent in the corresponding year.
The capital adequacy ratio was 16.24 per cent (16.94 per cent), which was above the statutory requirement of 12 per cent, he said.