Sundaram Finance Limited is a cornerstone of the Indian financial services landscape, established with a vision to be the country's most respected Non-Banking Financial Company (NBFC). With a heritage spanning over seven decades, the company has pioneered hire-purchase finance in India and built a formidable reputation grounded in trust, prudence, and discipline—principles encapsulated in "The Sundaram Way." This philosophy emphasizes service, integrity, and long-term relationships, viewing the company not merely as a holder of people's money but as a custodian of their trust.

The company has evolved into a diversified financial services conglomerate, the SF Group, with a total Assets Under Management (AUM) exceeding ₹1,70,000 crores. The group's operations extend across lending, general insurance, home finance, and asset management, serving a vast customer base of over 5.7 million through more than 1,150 branches nationwide. Its core lending business strategically focuses on empowering the underserved but aspirational Indian entrepreneur, including road transport operators, infrastructure contractors, small farmers, and MSME owners. This focus is complemented by a wide array of product offerings ranging from asset finance for commercial vehicles, cars, and construction equipment to commercial lending, working capital finance, and the distribution of financial products like insurance, home loans, and mutual funds.

Leadership is provided by an experienced Board of Directors and Key Managerial Personnel, combining decades of expertise in finance, manufacturing, consulting, and public policy. This blend of seasoned guidance and strategic vision has enabled Sundaram Finance to maintain consistent best-in-class asset quality and a deep-rooted connection with its deposit customers, evidenced by an impressive renewal rate of over 80%. By integrating a technology-enabled, data-powered approach with its traditional high-touch customer service model, the company is positioned to navigate the evolving financial ecosystem while upholding its foundational values.

Official Website: http://www.sundaramfinance.in/

• Assets Under Management (AUM): The company's AUM stands at ₹58,236 crores as of December 31, 2025, a significant 16.0% increase from ₹50,199 crores in the previous year. This demonstrates robust business growth and effective expansion of the loan book.

• Profitability and Returns:

• Profit After Tax (PAT): For the nine months ending in FY26 (9MFY26), PAT grew by a strong 23% to ₹1,226 crores, up from ₹997 crores in 9MFY25. This growth was driven by AUM expansion, improved yields, and tight cost control. An exceptional item of ₹66 crores was accounted for related to new Labour Codes.

• Return on Assets (ROA): ROA for 9MFY26 improved to 2.67% from 2.49% in the prior year, indicating more efficient use of assets to generate profits.

• Return on Equity (ROE): ROE for 9MFY26 increased to 15.5% from 14.3%. The core ROE, which excludes investments in subsidiaries, was 17.3%, highlighting the strong performance of the standalone lending business.

• Revenue and Income:

• Total Revenue: Total revenue for 9MFY26 was ₹5,534 crores, a substantial increase from ₹4,666 crores in 9MFY25.

• Net Interest Income (NII): NII grew by 21% to ₹2,475 crores in 9MFY26, reflecting healthy growth in the core lending operations.

• Balance Sheet Strength:

• Net Worth: The company's net worth has consistently grown, reaching ₹12,721 crores as of December 2025, up from ₹10,742 crores a year prior. This translates to a Book Value Per Share of ₹1,144.9.

• Capital Adequacy Ratio (CAR): CAR stood at a comfortable 19.1% as of December 2025. While this is a decrease from 20.0% a year ago, it remains well above the regulatory requirement, providing a strong buffer against potential losses.

• Leverage: The company maintains a stable leverage ratio of 4.2x, indicating a prudent and balanced approach to debt financing for its growth.

• Funding Profile: The funding mix is well-diversified. As of December 2025, the primary sources of funds were Bank Borrowings (34.4%), Debentures (34.2%), and Deposits (12.3%), ensuring financial stability and access to capital.

The company has demonstrated strong financial performance with robust growth in AUM and profits, improved efficiency metrics, and a solid capital position.

• Heritage of Trust: With a 72-year history, the company has built its brand on principles of trust, prudence, and ethical conduct. This "Sundaram Way" philosophy is a core differentiator that fosters deep, long-lasting customer relationships.

• Focus on Underserved Segments: The company has a strategic focus on financing entrepreneurs in critical, yet often underserved, sectors like road transport, infrastructure, and agriculture. This niche targeting allows for specialized expertise and stronger customer loyalty.

• Deep Customer Connect: A testament to its service quality is the high deposit renewal rate, which exceeds 80%. This indicates exceptional customer loyalty and trust, providing a stable and low-cost source of funding.

• Diversified Financial Services Group: Sundaram Finance is not a standalone lender. It is a large, diversified group with strong subsidiaries in home finance, asset management, and general insurance, creating multiple revenue streams and a comprehensive financial ecosystem for its customers.

• Consistent Asset Quality: The company has a multi-decade track record of maintaining best-in-class asset quality, even during challenging economic cycles. This is a direct result of stringent credit standards and a disciplined operational approach.

Sundaram Finance's unique market position is built on a foundation of trust, a strategic focus on niche entrepreneurial segments, and a consistent record of superior asset quality.

• Market Demand: The operating environment shows positive demand signals. For the quarter, industry sales in the company's key segments have seen high single-digit to low double-digit growth.

• Tractor Sales: Exceptionally buoyant, up 28% year-over-year, reflecting positive rural sentiment.

• Commercial Vehicles: Medium & Heavy Commercial Vehicle (MHCV) sales grew 8%, while Light & Small Commercial Vehicle (LSCV) sales were up 17%.

• Passenger Cars: Sales increased by 12% year-over-year.

• Systemic Pressures: The broader financial system is experiencing elevated asset quality pressures.

• Government Payments: Fiscal positions in several state governments remain challenged, leading to delayed payments to contractors and MSMEs.

• MSME Cash Flow: These payment delays have created adverse cash flow pressures on MSMEs across the financial system, impacting their repayment capacity.

The industry presents a mixed picture with healthy demand in key vehicle segments but faces headwinds from systemic cash flow issues affecting MSMEs.

• AUM and Disbursement Growth:

• Assets Under Management grew 16% year-over-year to ₹58,236 crores.

• Disbursements for 9MFY26 increased by 13% to ₹24,270 crores. Quarterly disbursements for Q3FY26 were up 14% to ₹8,847 crores.

• Market Share Gains: The company reports extending its market share across various asset classes and geographies and expects this trend to continue.

• Geographic and Asset Diversification: Disbursements are well-diversified. For 9MFY26:

• By Asset: The portfolio is led by MHCV (23.2%), Retail CV (19.0%), and Cars (24.8%). Used assets constitute a significant 22.3% of disbursements.

• By Region: The South remains the largest market (45.2%), followed by the West (24.8%) and North (23.2%), indicating a strong national presence.

• Network Expansion: The company has expanded its physical presence, with the number of branches increasing from 711 to 748 and staff growing from 7,344 to 7,589 over the past year.

The company is on a solid growth trajectory, driven by strong disbursement momentum, market share gains, and a strategic expansion of its physical network.

• Net Interest Income (NII): NII, a key measure of profitability for lenders, grew by a healthy 21% in 9MFY26. This was attributed to AUM growth and meaningful improvements in yields on assets.

• Cost Management: The company has demonstrated exceptional operational efficiency.

• Cost of Borrowing: Meticulous management of borrowing costs, consistent with its "AAA" credit rating, has protected margins.

• Cost-to-Income Ratio: This ratio improved significantly to a best-in-class level of 28.72% in 9MFY26, down from 31.37% in the previous year. This indicates superior control over operating expenses relative to income.

• Margin Optimization Strategy: Management is prudently focused on the mix of asset classes and customer segments to optimize margins going forward.

Strong NII growth combined with excellent cost control has led to improved margins and best-in-class operational efficiency.

• Credit Risk and Asset Quality: While the company's asset quality remains industry-leading, there has been a marginal uptick in non-performing assets.

• Gross Stage 3 Assets: Stood at 1.91% as of December 2025, compared to 1.70% a year earlier. Provision cover for these assets is 45%.

• Net Stage 3 Assets: Closed at 1.06%, up from 0.97% in the previous year.

• Macroeconomic Headwinds: The company's performance is linked to the health of the broader economy. As noted, cash flow pressures on MSMEs and contractors due to delayed government payments pose a risk to the repayment capacity of a key customer segment.

• Collections Performance: Current collections, measured as collections of current demand, stood at 91% for 9MFY26. While strong, this indicates that 9% of dues are not being collected on time, requiring focused collections activity.

The primary risk is a slight deterioration in asset quality, reflecting the broader economic pressures on its core customer base, though it remains at best-in-class levels.

• Shareholder Returns: An interim dividend of 160% (₹16 per share) was declared for FY26, signaling confidence in performance and a commitment to rewarding shareholders.

• Credit Ratings: The company holds the highest possible credit rating of 'AAA (Stable)' from both ICRA and CRISIL for its deposits, debentures, and long-term loans. Its Commercial Paper is rated 'A1+'. This top-tier rating allows access to funds at a competitive cost.

• Shareholding Pattern: As of December 2025, the promoters hold 37.2% of the company. It has a strong institutional holding, with FIIs/FPIs at 22.9% and Mutual Funds at 5.2%.

• Subsidiary Performance:

• Sundaram Home Finance: AUM grew to ₹19,230 crores. PAT for 9MFY26 increased to ₹212 crores from ₹173 crores.

• Royal Sundaram General Insurance: Gross Written Premium for 9MFY26 was ₹3,384 crores. PAT stood at ₹160 crores.

• Sundaram Asset Management: AUM reached ₹86,195 crores. PAT for 9MFY26 grew to ₹139 crores from ₹107 crores.

The company maintains the highest credit ratings, rewards shareholders with strong dividends, and benefits from the solid performance of its key subsidiaries in home finance, insurance, and asset management.