Sundaram Finance to retain focus on organic growth

CHENNAI: Sundaram Finance, a leading asset financing NBFC expects the strong growth in disbursements to continue this year on the back of robust sales in commercial vehicles, cars, utility vehicles, tractors and construction equipment. In 2009-10, it recorded a 29% growth in business at Rs 5834 crore and posted a 34% growth in net profit at Rs 201.36 crore. Its networth touched Rs 1316 crore.

Speaking at the 57th annual general meeting of the company in Chennai on Thursday, Chairman S Viji said in the first quarter, robust auto sales helped the company to register a healthy growth in disbursements.

The vehicle offtake is expected to remain buoyant in the second quarter though growth might slow down due to the implementation of new emission norms from October 1 and expected rise in vehicle cost. At the same time, the strong growth in the car segment is expected to continue aided by increasing exports and launch of new vehicles.

Besides the brisk demand for tractor financing, revival in infrastructure projects across the country bodes well. The company will retain focus on growing organically and maintaining asset quality. MD T T Srinivasaraghavan said the branch network has crossed 500 and it will look at expanding it to 625 to 650 before the year end.

Asked about the strategy to utilise the network for expanding financial services business, Mr Viji the group will always look at growing steadily keeping in view the interest of depositors and shareholders. As such, it has a range of savings and loan products like vehicle finance, home finance, mutual funds, deposits etc. The company has to build expertise and skilled people if it wants to expand the portfolio.

Asked about the plans for Sundaram mutual fund following the exit of BNP Paribas, he said there will no impact on the business and it will continue to grow. Sundaram has its strength in equity funds which account for 84% of its business. During 2001-02, when its first MF partner, Newton parted ways, it continued the business for three to four years without an alliance and assets under management grew from Rs 800 crore to Rs 2800 crore, Mr Viji pointed out.