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Last Updated : Jun 10, 2020 04:35 PM IST | Source: Moneycontrol.com

Buy Sundaram Finance; target of Rs 1482: Arihant Capital

Arihant Capital is bullish on Sundaram Finance has recommended buy rating on the stock with a target price of Rs 1482 in its research report dated June 08, 2020.

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Arihant Capital 's research report on Sundaram Finance


Sundaram Finance (SUF) reported mixed performance during Q4FY20. Operating performance of the company was in-line with our estimates while profit was impacted due to higher provisioning. NII for the quarter grew by 5% YoY to Rs 426 cr vs. exact match of our NII estimate. Operating profit growth was at 6% YoY to Rs 281 cr vs. our estimate of Rs 222 cr. Profit for the quarter stood at Rs 131 cr was impacted due to higher provisioning at 172% YoY (Arihant Estimate: Rs 196 cr). Net profit figure for Q4FY19 included an exceptional one-time income of Rs 592 cr on account of sale of shares in Royal Sundaram and hence annually PAT numbers are not comparable on a like to like basis. NIM declined by 19bps QoQ to 5.6% due to fall in portfolio yield. Asset quality witnessed an improvement as GNPA/NNPA ratio fell by 32bps/44bps QoQ to 2.47%/1.65% respectively.



Outlook


Disbursements during the quarter decreased by 27% QoQ due to weak demand in CV cycle and slowdown in consumption space. We maintain our ‘Buy’ rating on the stock with a revised TP of Rs 1,482 (earlier Rs 1,541).





For all recommendations report, click here

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First Published on Jun 10, 2020 04:35 pm
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