Results updates- Q3FY13
Sundaram Finance Ltd. incorporated in 1954 has grown today into one of the most trusted financial services groups in India, reported its financial results for the quarter ended 31st Dec, 2012. The third quarter witnesses a healthy increase in overall sales as well as profitability of the company.
The company’s net profit jumps to Rs1136.54 mn against Rs911.45 mn in the corresponding quarter ending of previous year, an increase of 24.70%. Revenue for the quarter rose 23.28% to Rs5474.85 mn from Rs4441.06 mn, when compared with the prior year period. Reported earnings per share of the company stood at Rs10.23 a share during the quarter, registering 37.65% decrease over previous year period, due to increase the equity capital of the company. Profit before interest, depreciation and tax is Rs4727.16 mn as against Rs3828.03 mn in the corresponding period of the previous year.
During the quarter total expenditure cost rose by 17 per cent mainly on account of increase in Employee Benefit Expenses along with consideration of depreciation in the rupee impact. Total expenditure in Q3FY13 was at Rs1068.39 mn as against Rs911.03 mn in Q3FY12. Administrative & Other Expenditure is at Rs315.19 mn against Rs306.60 mn in the corresponding period of the previous year. Employee Benefit Expenses were at Rs426.58 mn and Depreciation & Amortization Expense are Rs217.98 mn in Q3FY13 are the primarily attributable to growth of expenditure.
Outlook: At the current market price of Rs508.00, the stock P/E ratio is at 12.08 x FY13E and 9.96 x FY14E respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 22% and 22% over 2011 to 2014E respectively.
The company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. Investors are recommended to buy the stock for a price target of Rs542 for Medium to Long term investment.