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Sundaram Finance FY07 net down 41%

Sundaram Finance FY07 net down 41%
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First Published: Thu, May 31 2007. 12 40 AM IST
Updated: Thu, May 31 2007. 12 40 AM IST
Chennai: Sundaram Finance Ltd, a leading non-banking finance company, said net profit fell 40.9% to Rs101 crore for the fiscal year ended March, down from Rs171 crore a year earlier when it had one-time gains. But, income from operations increased 33% on the back of higher disbursements of loans to truck buyers.
The profit for the fiscal year ended March 2006 included a one-time profit of Rs88 crore from sale of its stake in a subsidiary. Excluding this, the net profit would have increased by 22% in the latest period. Profit has grown at a slower rate compared to income mainly because of a 43% increase in financial expenses.
Sundaram Finance has benefited from higher growth in the medium and heavy commercial vehicle segments, which grew by 33% during the year ended March 2007. Around 60% of loans given by the company is for such vehicles, where it has a market share of around 12%.
T.T. Srinivasaraghavan, managing director of Sundaram Finance, said rising interest rate, coupled with inflation rates, makes it difficult to predict growth in the key area of focus, commercial vehicles. “We will have to wait for another three to four months, to understand the impact of these changes”, he said.
For the three months ended March 2007, Sundaram Finance reported a net profit of Rs36 crore from a profit of Rs118 crore a year earlier. It was during the fourth quarter of fiscal 2006 that the stake sale in Sundaram Asset Management Co. took place.
Income from operations increased to Rs197 crore in the fourth quarter ended March 2007, against Rs130 crore in three months ended March 2006. In the current year, Srinivasaraghavan said the growth in disbursements would be between 12% and 15%, lower than 28% growth achieved in the year ended March 2007.
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First Published: Thu, May 31 2007. 12 40 AM IST