Sundaram Finance (SUNDARMFIN) Q4 18/19 earnings summary

Executive summary

• FY19 disbursements rose 9.3% to ₹17,170 cr; receivables under management grew 17% to ₹33,447 cr. Core lending growth continued despite a difficult vehicle market and NBFC liquidity pressures.

• Reported standalone PAT nearly doubled to ₹1,126.31 cr, including a ₹592.43 cr exceptional gain on the Royal Sundaram stake sale; consolidated PAT was ₹1,160.85 cr.

Financial highlights

• Standalone revenue from operations was ₹3,397.61 cr vs ₹2,806.27 cr; total revenue reached ₹3,418.17 cr vs ₹2,855.40 cr.

• Standalone PBT before exceptional items was ₹895.28 cr vs ₹849.71 cr; reported PAT was ₹1,126.31 cr vs ₹563.44 cr.

• Excluding the exceptional profit, standalone PAT was ₹604.05 cr and EPS was ₹54.37; reported EPS was ₹101.37 vs ₹50.71.

• Net worth reached ₹5,043.81 cr at 31 March 2019; consolidated total comprehensive income was ₹1,012.79 cr vs ₹877.87 cr.

Outlook and guidance

• FY20 vehicle outlook was subdued: SIAM estimated M&HCV growth of 5%, LCV growth of 9%-10%, and passenger vehicle growth of 3%-5%; tractor sales were expected to moderate.

• Liquidity, interest rates, BS VI implementation, oil prices and monsoon conditions made forecasts uncertain; a challenging year was expected for the economy and automotive sector.

• Margin pressure from higher funding costs and competition was expected to continue; plans included balancing higher- and lower-yielding assets while protecting asset quality.