Even as the economy is headed for a difficult phase, Chennai-based Sundaram Finance Ltd. (SFL) has reported a 38 per cent increase in its net profit from continuing operations to Rs.355 crore for the year ended March 31, 2012, up from Rs.257 crore in the preceding year.
The net profit figures aren't strictly comparable since the figure for 2010-11 includes a one-off Rs.38 crore exceptional dividend received by SFL from one of its subsidiaries, which had sold its sake in an unlisted company.
SFL disbursed Rs.9,307 crore during the year under review, up 25 per cent, from Rs.7,475 crore in the preceding year. The net non-performing asset (NPA) stood at 0.09 per cent as on March 31, 2012, as against 0.20 per cent as on March 31, 2011. The capital adequacy ratio is at a comfortable 16.33 per cent at the end of March 2012.
The board has recommended a final dividend of Rs.8 per share. The company had already paid an interim of Rs.7.50 per share. The total dividend thus comes to Rs.15.50 per share as against Rs.14 per share in the preceding year.
For the quarter ended March 31, 2011, the net profit was Rs.98.21 crore against Rs.98.20 crore (which included the aforesaid one-off Rs.38 crore). Disbursal during the quarter went up by 30 per cent.
Given the fact that the key parameters were “far from encouraging” and in the light of uncertain economic environment, T. T. Srinivasaraghavan, Managing Director of SFL, felt “it is too risky to make any forecast.” Addressing a press conference here on Monday, he said “it is better to play it by quarter-to-quarter.”
Fielding a range of questions, he said he did not expect any softening in interest rate. He said he would even stick his neck out and say the rates “can move in only one direction — up”. “If it stays at current levels, it will be a bonus,” he added.