See 5-6% growth in M&HCV; pass on increase in cost of borrowing: Sundaram Finance

Sundaram Finance is the stock on our radar as commercial vehicle sales have been strong post the advent of GST. The company also reported good earnings in Q3 with strong disbursement growth & improvement in asset quality.

TT Srinivasaraghavan, Managing Director, Sundaram Finance the volumes in month of January were because of pre-buying of commercial vehicles in the month of December. February and March would also be alright, so Q4 growth would not be Q4 would reasonably good.

Talking about disbursements in the commercial vehicle segment, he said the buying has become irrational because the tonnage capacity of bigger trucks has grown massively and so unit growth has reduced.  He said the growth in M&HCV and HCV would be in the high single digit or around 5-6 percent and not 15 percent as expected by some.

Asset quality for the company has been steady and the recovery has been solid, said Srinivasaraghavan.

Tractor segment did well for them but a good monsoon is important for the rural sentiment and rural buying, he said.

The increase in cost of funds/borrowing would eventually be passed on the customers, he said.