Sundaram Finance’s Q2 net profit slips ~7%

5 Nov 2024 , 09:45 AM

Sundaram Finance Ltd reported mixed results for Q2FY25 on Monday, with a year-on-year decline in quarterly net profit amid a strong increase in key operational measures in the first half of the fiscal year.

The company reported a Q2 standalone net profit of ₹340.09 Crore, a 7% decrease from ₹366.38 Crore in the same period last year. However, the financial services firm’s assets under management (AUM) climbed by 20% year-on-year to ₹48,058 Crore as of September 30, 2024, driven by increasing disbursements and stable asset quality.

Sundaram Finance reported its highest-ever disbursements in H1FY25, at ₹13,768 Crore, a 3% increase over H1FY24. Operational profit increased 23% year-on-year, indicating solid underlying company performance.

The net profit for the half-year remained constant at ₹648 Crore, affected by a considerable fall in dividend income, which fell to ₹43 Crore in H1FY25 from ₹181 Crore in H1 FY24.

Executive Vice Chairman Harsha Viji emphasised the company’s “steady and sustainable growth” despite sluggish economic activity, citing an improvement in asset quality as Gross Stage 3 assets fell to 1.62% with a 45% provision cover, down from 1.86% the previous year.

Return on assets (ROA) decreased to 2.50% from 2.95% in H1FY24, indicating a cautious approach in the current macroeconomic situation.

The company’s capital adequacy ratio was a healthy 20%, which supported future expansion plans.

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