SUNDARMFIN - Investment Analysis

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

Investment Rating: 4.4

🏦 Fundamental Analysis: Sundaram Finance Ltd (SUNDARMFIN)

Strengths

ROE (15.3%) & ROCE (9.64%): Solid profitability for an NBFC, with consistent improvement.

EPS (₹169): Strong earnings base, reflecting operational efficiency.

Debt-to-Equity (4.63): High, but typical for lending institutions; well-managed.

Dividend Yield (0.74%): Modest but consistent, with a history of regular payouts.

Quarterly PAT Growth (81.4%): Strong rebound, signaling improving margins.

P/E (28.4) vs Industry P/E (25.2): Slight premium, justified by quality and consistency.

Concerns

PEG Ratio (1.70): Fair, but not cheap.

RSI (33.5): Near oversold, indicating weak momentum.

MACD (-21.5): Bearish crossover, confirming downtrend.

Price below 50 DMA & near 200 DMA: Technical weakness, but approaching support.

📉 Technical & Trend Analysis

Volume Surge: Current volume is nearly double the weekly average, suggesting accumulation.

Price Trend: Down ~14% from 52-week high; approaching support near ₹4,600.

Beta (1.20): Moderate volatility, suitable for long-term investors.

💰 Ideal Entry Price Zone

Accumulation Zone: ₹4,600–₹4,750

This range aligns with 200 DMA and historical support.

Below ₹4,600, consider aggressive accumulation if fundamentals remain intact.

🧭 Exit Strategy / Holding Period

If you already hold SUNDARMFIN

Hold for 5–10 years for long-term compounding, supported by strong fundamentals and sector tailwinds.

Exit partially if price approaches ₹5,900–₹6,300 and valuation becomes stretched.

Reassess if ROE drops below 12% or asset quality deteriorates.

📈 Long-Term Outlook

Year Target Price Range (₹)

2026 6,233 – 7,904

2027 7,821 – 9,918

2030 10,200 – 12,500

Growth Drivers: Strong presence in vehicle finance, SME lending, and insurance; backed by TVS Group.

Risks: Interest rate sensitivity, regulatory changes, and credit cycle downturns.

Would you like a comparison with peers like Bajaj Finance or Cholamandalam to assess relative positioning in the NBFC space?

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