Sundaram Finance records highest-ever disbursements of Rs 20,966 cr

CHENNAI: After three challenging years, thanks to the slowdown in commercial vehicles business and two years of pandemic, Sundaram Finance has gone back to its pre-COVID growth trajectory, reporting its highest-ever disbursements of Rs 20,966 crore in FY23.

The Chennai-based non-banking financial company (NBFC) has seen 17 per cent year-on-year growth of its total assets under management at Rs 34,552 crore as on March 31, 2023, against Rs 29,532 crore as on March 31, 2022.

Rajiv Lochan, MD, Sundaram Finance said it is the first time that without any exceptional income, the profits have breached the Rs 1,000 crore mark. “It has been a satisfying year of growth with quality and profitability powered by our people, processes and technology. As inflation eases and economic activity continues to gather pace, global factors notwithstanding, we expect growth in the economy to sustain.”

He said the measured growth was on the back of the NBFC seeing its market share surging across diversified markets where it operates. The commercial vehicle business, especially medium and heavy CVs, and the southern market with its historical strength have boosted its performance. Sundaram Finance reported a net profit of Rs 1,088 crore for FY23, an increase of 20 per cent against Rs 903 crore in FY22.

Lochan also said in the passenger vehicle segment, it could not compete with banks but its efforts to tap newer segments – construction equipment and tractors, were paying off. “We would like to target over 5 per cent market share from the current 4 per cent level,” he said.

With margins getting compressed and having to compete with banks in the medium and heavy CV business, there is a concentrated effort by the NBFC to look at non-banking segments. As part of its strategy to attract customers, its product array includes leasing solutions, insurance, fixed deposits and treasury solutions also.

While the NBFC continues to have a tight grip in south, most of its expansion has taken place in the north of the Vindhyas. It has opened 62 branches, with a small number in TN, where it has focused on building its tractor portfolio. “We remain measured in our expansion plans and we do not have greenfield branches,” he sought to point out.

The NBFC declared a dividend of Rs 15 per share apart from an interim dividend of Rs 12 for FY23, taking its total payout to Rs 27 on a Re 10 share.