Hold Sundaram Finance; target of Rs 4800: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Sundaram Finance with a target price of Rs 4800 in its research report dated August 05, 2025.

Broker Research

August 06, 2025 / 13:50 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Sundaram Finance

Q1 has seen soft disbursement growth (+6% YoY) due to low government spending/ general slowdown in economic activity. We build a growth of 15.5% in FY26, anticipating a pick-up in economic activity in H2. Calculated NIM stood largely stable at 5.2%; we expect a similar trend in FY26 supported by a lower CoF. Asset quality trends have deteriorated in the quarter (GS3/NS3 at 1.91%/ 1.08%) due to payment pressures in the MSME segment; however collection activity remains healthy.

Outlook

We marginally tweak our estimates and value SUF’s standalone business at Rs 3,882 (3.1x Mar-27 ABV) and assign a value of Rs 918 to subsidiaries with a 20% holding company discount to arrive at a TP of Rs 4,800. Weak outlook on growth and higher credit costs are a drag. Maintain HOLD rating as the stock price captures all the positives.

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