SUNDARMFIN - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.0

📊 Core Financials Analysis

Profitability

Quarterly PAT: ₹553 Cr vs ₹455 Cr — strong growth (Qtr Profit Var: +81.4%), signaling operational momentum.

ROE: 15.3% — solid return on equity, typical for NBFCs.

ROCE: 9.64% — moderate, reflecting capital-intensive nature of lending businesses.

EPS: ₹169 — impressive earnings per share, supports valuation.

Debt & Leverage

Debt-to-equity: 4.63 — high, but expected for financial institutions; manageable if asset quality remains strong.

Dividend Yield: 0.74% — modest, but consistent.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 28.4 Slightly above industry PE (25.2), but justified by earnings growth

P/B Ratio ~4.0 Premium valuation, reflects strong profitability

PEG Ratio 1.70 Fairly valued — growth supports current price

Intrinsic Value Close to ₹4,500–₹4,700 Price aligns with fundamentals, not deeply undervalued but not overpriced either

🧠 Business Model & Competitive Advantage

SUNDARMFIN (Sundaram Finance) is a well-established NBFC with a focus on vehicle finance, home loans, and asset management.

Strengths

Strong brand and legacy in South India

Conservative lending practices and stable asset quality

Consistent profitability and low NPAs

Weaknesses

High leverage

Limited national footprint compared to larger peers

Slight drop in FII holdings (−0.19%)

📌 Entry Zone Recommendation

RSI: 33.5 — oversold zone, attractive for accumulation.

MACD negative — bearish momentum, but reversal likely near support.

Support Range: ₹4,400–₹4,600 is a favorable entry zone.

Avoid chasing above ₹5,000 unless earnings continue to surprise.

🕰️ Long-Term Holding Guidance

Strong long-term hold for conservative investors seeking steady growth and financial sector exposure.

Ideal for 3–5 year horizon with potential for compounding.

Monitor credit growth, asset quality, and interest rate trends.

Accumulate on dips and hold through cycles.

Would you like a comparison with Cholamandalam Investment or Bajaj Finance to assess positioning among NBFCs?

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