Add Sundaram Finance, target price Rs 1849: ICICI Securities

ICICI Securities has add call on Sundaram Finance with a target price of Rs 1849. The current market price of Sundaram Finance is Rs 1584.75. Time period given by analyst is one year when Sundaram Finance Ltd. price can reach defined target.

Sundaram Finance Ltd., incorporated in the year 1954, is a Large Cap company (having a market cap of Rs 17609.96 Crore) operating in NBFC sector.

Sundaram Finance Ltd. key Products/Revenue Segments include Interest, Fees & Commission Income, Dividend, Lease Rentals, Other Services, Bad Debts Recovery for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 1289.80 Crore, down -.71 % from last quarter Total Income of Rs 1298.99 Crore and down -7.59 % from last year same quarter Total Income of Rs 1395.73 Crore. Company reported net profit after tax of Rs 262.87 Crore in latest quarter.

Investment Rationale
Sundaram Finance’s (Sundaram) Q4FY22 earnings, like peer performance, was highlighted by improvement in credit cost. While standalone pre-provisioning profit (PPOP) was down 4% QoQ, PAT was up almost 50% QoQ. However, QoQ decline in disbursements in all categories except CV leading to 1% QoQ AUM decline is noteworthy and distinct from peers. Sundaram’s lower growth in Q4FY22 also questions the possible trends ahead considering the traditional conservative policy of the company. Operational performance of key subsidiaries continued to be strong. Consolidated PAT grew 27% QoQ.

Promoter/FII Holdings
Promoters held 38.49 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.91 per cent, DIIs 14.27 per cent.