Sundaram Finance - Economic Revival To Lead Earnings Growth: Centrum Broking
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Centrum Broking Report
Sundaram Finance Ltd.’s earnings were ahead of estimates led by better net interest margin/fee income.
Net interest income at Rs 4.6 billion (estimate Rs 4.0 billion) was a beat driven by lower interest cost and gain on future value changes.
Even after adjusting the same NIM saw a YoY uptick from 4.7% to 5.1%. This NIM level may not be sustainable and NIM could contract since as the economy revives, medium and heavy commercial vehicle disbursals (lower yielding) would rise.
Business was strong with disbursals seeing an 8.5% YoY growth while repayments were Rs 36.5 billion.
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