Sundaram Finance
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Sundaram Finance's recent performance highlights a resilient trajectory, with management projecting a robust AUM growth of 17% in FY27, driven by strong disbursement growth in the vehicle finance segment. This aligns with Vista's forecast of stable revenue growth and improving margins, supported by the company's strategic focus on maintaining a high-quality, diversified loan book. However, potential headwinds include rising operational costs and a deterioration in asset quality, which could pressure margins if not managed effectively. The NBFC lending sector's improving pricing power and favorable macro conditions, such as declining repo rates, further bolster the outlook. Over the next 12-24 months, key opportunities lie in leveraging subsidiary performance and the growing demand for vehicle financing, while watchpoints include geopolitical uncertainties and credit cost fluctuations due to potential monsoon shortfalls. Overall, Vista's strong buy recommendation reflects an expected upside of approximately 42%, with a 12-month target price of ₹6636.23, underpinned by the company's attractive valuation relative to its intrinsic value estimate
Why We Like This Stock
- Management projects robust AUM growth of 17% in FY27, driven by strong disbursement growth in the vehicle finance segment
- Sundaram Finance's subsidiaries are performing well, contributing positively to overall business growth
- The NBFC sector's improving pricing power and favorable macro conditions enhance the company's growth prospects
Things To Watch Out For
- Rising operational costs and a deterioration in asset quality could pressure margins if not managed effectively
- Geopolitical uncertainties and potential monsoon shortfalls may impact credit costs and overall performance
- Market sentiment remains cautious, reflecting concerns over the sustainability of recent growth trends
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 3,856 | 4,287 | 5,064 | 5,448 | 6,283 |
| Profit Before Tax (Cr.) | 2,051 | 2,413 | 2,757 | 3,874 | 4,399 |
| PBT Margin | 53.2% | 56.3% | 5444.3% | 71.1% | 70.0% |
| Net Profit (Cr.) | 1,903 | 1,921 | 2,096 | 2,876 | 3,266 |
| Earnings Per Share | 134.8 | 172.9 | 188.7 | 258.9 | 294.0 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| HDFC Securities | ► Add | 4,835 | 27-May-2026 |
| IDBI Capital | ► Hold | 5,260 | 04-Aug-2026 |
| Prabhudas Liladhar | ► Accumulate | 5,070 | 04-Aug-2026 |
Company Overview
Show Company Profile
Sundaram Finance Limited, together with its subsidiaries, operates as a non-banking finance company in India. It accepts fixed, cumulative, and NRI deposits. The company also offers finance for new and used cars, new and used commercial vehicles, and new and used construction equipment; diesel finance for commercial vehicle operators and companies; tire and insurance finance; farm equipment finance for new/used tractors, harvesters, and farm implements; SME finance working capital, enterprise business, and machinery term loans, as well as channel finance; housing finance; and leasing services. In addition, it provides life insurance products comprising child, pension, whole-life, term, and investment plans; general insurance products, such as health, home, property, medical, and vehicle insurance products; mutual funds; and information technology, and business processing and support services. Further, it offers a suite of investment management services, which include asset allocation and execution, portfolio management, tax management, risk management, and estate management. The company was incorporated in 1954 and is based in Chennai, India.