Sundaram Finance Posts 16% Profit Growth in Q2, Driven by Strong Festive Season

Sundaram Finance announced a standalone net profit of ₹394.2 crore for the second quarter, representing a significant 16% year-on-year growth. This performance was primarily driven by increased loan disbursements during the festive period. The company's revenue from operations also saw an 18% jump to ₹1,615 crore, with net interest income rising by 21% to ₹822 crore. Disbursements increased by 18% to ₹8,113 crore compared to the previous year.

Managing Director Rajiv Lochan expressed a positive outlook for the third quarter and the second half of the fiscal year, anticipating buoyant consumption, improved rural demand post-monsoon, and a pickup in private sector capital expenditure. The company's Assets Under Management (AUM) grew by 15% to ₹55,419 crore as of September 2025.

However, asset quality experienced some pressure, with gross Stage 3 assets rising to 2.03% from 1.62% in the year-ago period, and net Stage 3 assets increasing to 1.13% from 0.89%.

At the consolidated level, Sundaram Finance reported a 12% year-on-year increase in net profit to ₹488 crore, supported by a 14% rise in consolidated revenue to ₹2,386 crore. The consolidated results include its subsidiaries in home finance, asset management, and general insurance.

Additionally, the board approved the acquisition of Capitalgate Investment Advisors by Sundaram Alternate Assets for ₹35 crore. Sundaram Finance shares closed 2% higher at ₹4,691 on the NSE.

Impact: This news is important for investors as it showcases strong financial performance and strategic expansion by Sundaram Finance, albeit with a minor concern on asset quality. The positive outlook suggests potential for continued growth. The stock's upward movement reflects investor confidence. Impact Rating: 7/10.

Difficult Terms: * **Standalone Net Profit**: The profit earned by a company from its own operations, excluding the financial results of its subsidiaries or joint ventures. * **Revenue from Operations**: The total income generated by a company from its primary business activities before deducting expenses. * **Disbursements**: The total amount of money lent out by a financial institution to its customers over a specific period. * **Net Interest Income (NII)**: The difference between the interest income earned by a lender on its assets (like loans) and the interest paid out on its liabilities (like deposits). * **Assets Under Management (AUM)**: The total market value of all the financial assets managed by a financial institution on behalf of its clients. For lenders, it typically refers to the total value of outstanding loans. * **Stage 3 Assets (Gross and Net)**: In financial reporting, Stage 3 assets are loans that are considered impaired, meaning there are significant doubts about timely repayment. Gross Stage 3 assets are the total outstanding amounts, while Net Stage 3 assets are the gross amounts less any provisions made for expected losses. An increase signifies a potential rise in bad loans. * **NBFC**: Non-Banking Financial Company. An entity that provides financial services but does not hold a full banking license. * **Consolidated**: Financial statements that combine the accounts of a parent company and all its subsidiaries, presenting them as a single entity.