Sundaram Finance registers 35% growth in net profit

RELATED NEWS Sundaram Finance up 5.5% on bonus approval Sundaram Entmt Services Opp Fund extends NFO period Sundaram Fin. Services Oppor. Fund extends NFO period ALSO READ See latest News about Sundarmfin See previous management interviews See what other Experts & Brokerages are saying about Sundarmfin Sundarmfin BSE | NSE 25/05/12 Are Mutual Funds betting on Sundarmfin?

In a year marked by slowdown in the CV segment, leading Chennai based NBFC and a strong player in the Commercial Vehicle and Car Finance segments, Sundaram Finance Limited (SFL) has reported a Net Profit of Rs.212.55cr for the year ended 31^st March 2008, including a one time profit on the sale of shares in Sundaram Home Finance Limited. The Net Profit figures for 2007-08 and 2006-07 are not comparable as a result of this one time income.

 

Net Profit from continuing operations - excluding the one time profit of Rs.76.82cr - for the year ended 31^st March 2008, was Rs.135.73cr, up 35% from Rs.100.47cr for the year ended 31^st March 2007.

 

1:1 Bonus Issue

 

The Board of Directors of Sundaram Finance Ltd., at its meeting held in Chennai today, recommended a 1:1 bonus issue. The board also recommended a final dividend of 50% for the year ended 31^st March 2008. The final dividend, along with the interim dividend of 100%, takes the total dividend for 2007-08 to 150%.

 

A Milestone- Net worth crosses Rs.1000crores  

 

Sundaram Finance also reported another significant milestone in its growth path. The company's Net worth crossed Rs.1000cr during the year 2007-08 and stood at Rs. 1043cr, as on 31^st March 2008.

 

The disbursements for the year ended 31^st March 2008 stood at Rs.5109cr, up 16% from Rs.4386cr for the year ended 31^st March 2007. Capital Adequacy at 14.20% as on 31^st March 2008 was well above the statutory requirement of 12%. Net NPA as on 31^st March 2008 stood at 0.49% as against 0.54% in the previous year.

 

Financial Highlights         

 

Particulars	2007-08	2006-07	% growth
Disbursements	Rs. 5109cr	Rs. 4386cr	16.4%
Net Profit excl. one time profit **	Rs. 135.73cr	Rs. 100.47cr	35%
Net Worth	Rs. 1043cr	Rs. 877.88cr	19%
Receivables under management	Rs.8924cr	Rs. 7326cr	21.8%

 

 

 

 

 

 

 

 

 

 

 

 **Net Profit- Rs.212.55cr (including one time profit of Rs.76.82cr) 

  

Commenting on the company's performance in 2007-08, T.T. Srinivasaraghavan, Managing Director, Sundaram Finance Ltd., said, "We are pleased to have achieved a 'better than market' performance. In spite of a slowdown in the medium and heavy commercial vehicle (M&HCV) segment, which reported a negative growth, Sundaram Finance increased its market share not only in the M&HCV segment but in the LCV and Car segments as well, as a result of its 'Close to Customer' strategy."

           

Network Expansion- Opens 200+ offices across India

 

In keeping with this strategy, Sundaram Direct, the distribution arm of Sundaram Finance, expanded its presence significantly, opening over 200 new branches across India, in 2007-08. With this Pan India expansion, Sundaram Finance now has over 425 offices, with presence in 21 states and 235 districts across the country.

 

Plans for the year

 

The company expects to add another 100 branches this year that will take the branch network to over 525 by March 2009.

 

On the ambitious branch network expansion, Srinivasaraghavan said, "We believe there is a big opportunity in distribution. Reaching out to customers through personalized service and delivering a consistently superior customer experience have been our key differentiators in the market place. Sundaram Direct's expansion to smaller centres takes our 'customer reach' to the next level. We will continue to push forward with the expansion of our branch network, in line with our stated objective of delivering the 'Sundaram Experience' to our customers across the country."

 

Mutual Fund Business

 

The mutual fund business reported impressive results for the year. The (average) Assets under Management (AUM) of Sundaram BNP Paribas Asset Management Company Ltd. was Rs.12827cr for the year 2007-08, up 66% from Rs.7729cr for the previous year. Profit after Tax for 2007-08 was significantly higher at Rs.18.50cr, as against Rs.5.75cr in 2006-07.

 

During the year, Sundaram BNP Paribas Mutual launched the Energy Opportunities Fund which mobilized nearly Rs.3000cr from over 5Lakh investors. Notwithstanding the volatility in the markets, the Sundaram BNPP funds performed well. It is noteworthy that five of Sundaram BNPP's funds were ranked in the Global Top 100 in the Lipper Global Mutual Funds rankings that comprised a total of over 24000 mutual funds.

 

Home Finance Business

 

During the year, Union de Crédit pour le Bâtiment (UCB) a wholly-owned subsidiary of BNP Paribas, France, acquired a 49.9% stake in Sundaram Home Finance Limited (SHFL), a wholly-owned subsidiary of SFL, for a consideration of Rs. 196.98 cr. The Joint Venture, now christened Sundaram BNP Paribas Home Finance Limited, has reported good results for the year.

 

The company's disbursements grew by over 22% to Rs.585cr in 2007-08 from Rs.477cr in 2006-07. Profit after Tax at Rs.22cr, registered a healthy growth of 50% over the previous year's PAT of Rs.14.60cr. Sundaram BNP Paribas Home Finance's loan portfolio stood at Rs.1432cr as on 31^st March 2008. The company's net NPA stood at 0.07%, representing the best in the industry.

 

Insurance business

 

Royal Sundaram Alliance Insurance Company Limited registered a growth of 16% in Gross Written Premium, having underwritten a premium of Rs. 695cr. This is to be viewed in the backdrop of the steep fall in premium rates industry wide, in the wake of de-tariffing. The company enjoys a strong position in motor insurance and aims to strengthen its presence in the other retail segments as well.

 

Outlook for the year

 

Looking ahead to 2008-09, Srinivasaraghavan said, "The outlook for the year is muted, with concerns around inflation and spiralling global oil prices. With the slowdown in the automotive sector likely to continue, growth prospects appear rather uncertain during the current year."

 

On the interest rate scenario, Srinivasaraghavan said, "We expect interest rates to remain at the current levels. We do not see any major shifts unless there are significant global developments that impact our economy."

 

 Highlights

 

-          Recommends 1:1 Bonus Issue

-          Net Worth crosses Rs.1000 Crores

-          Branch network expands to over 425 offices

-          Presence in 21 states and 235 districts

-          Plans to open 100 new offices this year

 

Sourced From: proPR