Centrum Broking: Sundaram Finance Logs In-Line Q1 Performance, Asset Quality Intact 
An employee counts Indian rupee banknotes at a Walmar (Photographer: Dhiraj Singh/Bloomberg)

Centrum Broking: Sundaram Finance Logs In-Line Q1 Performance, Asset Quality Intact 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Centrum Broking Report

Sundaram Finance Ltd.’s earnings were largely in-line. Net interest income at Rs 3.8 billion came in as expected though drop in fee income led to a miss on pre-provision operating profit.

Healthy net interest margin trajectory was intact with incremental funding cost trending downwards. Assets under management declined by 1.3% YoY as disbursements saw a steep drop though repayments were higher which was a positive.

Disbursements and collection efficiency are picking up. Asset quality was contained sequentially though Covid-19 provisions were Rs 1.1 billion taking the total Covid-19 reserve to Rs 1.37 billion (appropriation of profits).

Average moratorium is 55% - though moratorium one to two saw a drop from approximately 65% to approximately 45%. We see return on assets/return on equity scale up to 2.2%/13.6% in FY22E

Click on the attachment to read the full report:

Centrum Sundaram Finance Q1FY21 Result Update.pdf

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