Sundaram Finance has reported a notable double-digit growth in profit after tax (PAT) and record-high disbursements for FY24. The Board has recommended a final dividend of ₹16 per share (160 per cent), bringing the total dividend to ₹30 per share (300 per cent).
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The Chennai-headquartered non-banking financial company (NBFC) saw its PAT (excluding exceptional items) increase by 23 per cent to ₹1,334 crore in FY24 from ₹1,088 crore in FY23. This growth was driven by strong net interest income and disbursements. For Q4 FY24, PAT (excluding exceptional items) rose by 22 per cent to ₹386 crore compared to ₹316 crore in Q4 FY23.
Net interest income grew by 17 per cent in FY24. Disbursements surged by 25 per cent to ₹26,163 crore (highest-ever), up from ₹ 20,966 crore in the previous year. In Q4 FY24, disbursements increased by 18 per cent to ₹6,209 crore from ₹5,259 crore in Q4 FY23.
Rajiv Lochan, Managing Director of Sundaram Finance, attributed the strong disbursement growth to a focused market share strategy across asset classes and geographic expansion.
In FY24, medium and heavy commercial vehicles accounted for about 26 per cent of total disbursements, cars for about 24 per cent, and retail commercial vehicles (including intermediate, light, and small commercial vehicles) for 21 per cent. Regionally, the South accounted for 54 per cent of disbursements, followed by the North (28.5 per cent), West (13 per cent), and East (4.5 per cent).
The company expanded its branch network to 710 in FY24 from 671 in FY23, with staff strength growing to 7,459 from 7,199.
As of March 31, 2024, the Gross and Net Non-Performing Assets (NPA) stood at 1.98 per cent and 1.25 per cent respectively, compared to 3 per cent and 2.10 per cent as of March 31, 2023. Assets under management grew by 27 per cent to ₹43,987 crore as of March 31, 2024, up from ₹ 34,552 crore as of March 31, 2023.
During FY24, the company sold 79.73 lakh equity shares of ₹5 each held in Sundaram Finance Holdings Ltd, representing a 3.59 per cent stake, resulting in a profit of ₹134 crore. Consequently, SFHL is no longer a subsidiary of Sundaram Finance.
“We expect FY25 to be a tale of two halves — H1 impacted by the general elections and projected normal monsoons, and H2 witnessing a revival in demand and private investment,” said Lochan.