Sundaram Finance - Strategy Of Diversification Paying Off; Growth Outlook Strong: Nirmal Bang

Nirmal Bang Report

We hosted the management of Sundaram Finance Ltd. as a part of our Virtual Investor Conference. Key takeaways from the meeting include:

• Expect overall growth of 8-10% for the auto industry led by medium and heavy commercial vehicle, retail commercial vehicle and construction equipment segments. While H1 FY25 could see a disruption in economic activity due to elections, growth in H2 FY25 is likely to be strong.

• Focusing on gaining market share in the MHCV, retail cv and tractor segments and expanding in new geographies through 'sub-branches.' Within micro, small and medium enterprise/ home finance, it is targeting southern states.

• Will be cautious on asset quality trends at a system level in the near-term due to likely stress emanating from states going into elections

• We have an 'Accumulate' on Sundaram Finance and its standalone business at Rs 2,752 (3.7 times Dec-25 adjusted book ) and assign a of Rs 798 to subsidiaries with a 20% holding discount to arrive at a target price of Rs 3,550.

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