Buy Sundaram Finance; target Rs 542: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research is bullish on Sundaram Finance and has recommended buy rating on the stock with a target price of Rs 542 in its February 23, 2013  research report.

"Sundaram Finance incorporated in 1954 has grown today into one of the most trusted financial services groups in India. Sundaram Finance has allotted 5,55,51,930 equity shares of Rs.10/- each fully paid-up as bonus shares to the equity shareholders of the Company in the proportion 1:1. During the quarter, the robust growth of Net Profit is increased by 24.70% to Rs. 1136.54 million. Sundaram Infotech Solutions, the subsidiary of Sundaram Finance, has signed an expanded deal with Easybookings, a Victoria - headquartered online ticketing and event management firm in Australia. Sundaram Infotech Solutions has bagged a multi-year Enterprise Software Solution deal from a leading several-decades-old Tokyo headquartered Japanese chemical manufacturing company. The Disbursements of the company for nine months ended 31st Dec 2012 increased 12% to Rs. 7400 crore compared to 6598 crore in the same period last year. Net Sales and PAT of the company are expected to grow at a CAGR of 22% and 22% over 2011 to 2014E respectively.

The company's net profit jumps to Rs.1136.54 million against Rs.911.45 million in the corresponding quarter ending of previous year, an increase of 24.70%. Revenue for the quarter rose 23.28% to Rs.5474.85 million from Rs.4441.06 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.10.23 a share during the quarter, registering 37.65% decrease over previous year period, due to increase the equity capital of the company. Profit before interest, depreciation and tax is Rs.4727.16 millions as against Rs.3828.03 millions in the corresponding period of the previous year.

At the current market price of Rs.508.00, the stock P/E ratio is at 12.08 x FY13E and 9.96 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.39.73 and Rs.48.17 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 22% and 22% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 7.03 x for FY13E and 6.09 x for FY14E. Price to Book Value of the stock is expected to be at 2.33 x and 1.89 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY' in this particular scrip with a target price of Rs 542 for Medium to Long term investment," says Firstcall Research report.

Institutional holding more than 40% in Indian cos

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