Sundaram Finance Limited (SUNDARMFIN) AI Stock Analysis

• Market Cap: ₹583.41B
• Dividend Yield: 0.71%
• Average Volume (3M): 2.07K
• Price to Earnings (P/E): 29.4
• Beta (1Y): 1.22
• Revenue Growth: 15.31%
• EPS Growth: 25.88%
• Country: IN
• Employees: 5,059
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 35.48
• Shares Outstanding: 111,103,860
• 10 Day Avg. Volume: 1,586
• 30 Day Avg. Volume: 2,070
• PEG Ratio: 0.86
• Price to Book (P/B): 3.77
• Price to Sales (P/S): 5.97
• P/FCF Ratio: -5.51
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: ₹5,566.00 ▲(6.01% Upside)

Sundaram Finance Limited's overall stock score is driven primarily by its strong revenue growth and operational efficiency, despite challenges in profitability margins and cash flow management. The technical analysis indicates short-term bullish momentum, but medium to long-term resistance. Valuation metrics suggest moderate pricing, with a low dividend yield. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Revenue Growth Trend

Sustained mid-teens revenue growth reflects durable demand for vehicle finance and related services. Given Sundaram's pan-India presence and steady origination capabilities, this trajectory supports scalable interest and fee income over 2-6 months, aiding reinvestment and market share gains.

High Operational Margins

Exceptionally high gross and EBIT margins indicate structural cost efficiency and pricing power in core financing and fee businesses. These margins provide a durable buffer to absorb credit costs, fund investments, and sustain profitability even through modest industry stress over the medium term.

Diversified Business Model & Distribution

Multiple revenue streams (interest, insurance commissions, asset management fees) and strong dealer/manufacturer partnerships reduce earnings volatility and deepen customer access. This diversified, distribution-led model supports resilient cash generation and competitive advantage over time.

Negative Factors

High Leverage

A D/E near 4x materially raises funding and refinancing risk, especially for a lending franchise. Elevated leverage amplifies sensitivity to interest rate moves and credit stress, potentially constraining growth, capital allocation flexibility, and long-term resilience if credit costs rise.

Negative Operating & Free Cash Flow

Persistently negative operating and free cash flows signal liquidity and cash-generation issues despite accounting profits. This structural cash shortfall increases reliance on external funding, limits the ability to self-finance loan growth or cushions against stress, and pressures long-term stability.

Compression in Net Profit Margin

Falling net margins despite strong gross margins suggest rising operating or credit costs, or increased funding expenses. Over the medium term this erodes retained earnings and return on equity, reducing internal capital generation and making the business more dependent on external capital.

Sundaram Finance Limited Business Overview & Revenue Model

Company Description

Sundaram Finance Limited provides a range of financial services in India. It accepts fixed, cumulative, and NRI deposits. The company also offers finance for new and used cars, new and used commercial vehicles, and new and used construction equipment; diesel finance for commercial vehicle operators and companies; tire and insurance finance; finance for new/used tractors, harvesters, and farm implements; working capital, enterprise business, and machinery term loans, as well as channel finance; housing finance; and leasing services. In addition, it distributes a range of financial products, such as mutual funds, insurance, etc.; and provides information technology, and business processing and support services. Further, the company offers a suite of investment management services, which include financial planning, asset allocation and execution, portfolio management, tax management, risk management, and estate management; and life insurance products comprising child, pension, whole-life, term, and investment plans. It operates through a network of 618 branches. The company was incorporated in 1954 and is based in Chennai, India.

How the Company Makes Money

Sundaram Finance generates revenue through multiple key streams, primarily through interest income from loans, which constitutes a significant portion of its earnings. The company provides financing for commercial and personal vehicles, and the interest charged on these loans is a primary revenue source. Additionally, it earns income from its insurance and mutual fund businesses, where it receives commissions and management fees. Strategic partnerships with manufacturers and dealers of vehicles enhance its distribution capabilities and customer reach, further contributing to its revenue. The company's diversified portfolio, including investment income from its asset management segment, also plays a crucial role in bolstering its overall earnings.

Sundaram Finance Limited Financial Statement Overview

Summary

Sundaram Finance Limited demonstrates strong revenue growth and operational efficiency, but faces challenges with profitability margins and cash flow management. High leverage poses potential risks, requiring careful monitoring. Overall, the company shows resilience in revenue generation but needs to address liquidity and leverage concerns to ensure long-term stability.

Income Statement

Sundaram Finance Limited has shown strong revenue growth with a 16.51% increase in the latest year, indicating a positive trajectory. The gross profit margin remains high at 88.71%, showcasing efficient cost management. However, the net profit margin has decreased to 22.23% from previous years, suggesting some pressure on profitability. The EBIT margin is robust at 70.56%, reflecting strong operational performance.

Balance Sheet

The company has a high debt-to-equity ratio of 3.97, indicating significant leverage, which could pose financial risks. Return on equity is solid at 14.24%, suggesting effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced asset structure but with potential risk due to high debt levels.

Cash Flow

Cash flow performance is concerning, with negative operating and free cash flows, indicating liquidity challenges. The free cash flow to net income ratio is slightly above 1, suggesting some alignment with profitability, but the negative growth in free cash flow highlights potential cash management issues.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	87.29B	83.38B	69.78B	53.21B	50.30B	51.91B
Gross Profit	44.27B	42.14B	36.28B	29.53B	27.82B	25.32B
EBITDA	27.28B	26.70B	21.44B	18.50B	15.18B	14.23B
Net Income	19.20B	18.79B	14.36B	13.28B	11.73B	11.65B
Balance Sheet
Total Assets	0.00	753.37B	642.76B	560.66B	481.54B	465.93B
Cash, Cash Equivalents and Short-Term Investments	0.00	11.47B	15.03B	11.45B	2.06B	2.36B
Total Debt	0.00	524.06B	443.52B	358.81B	302.07B	305.30B
Total Liabilities	-131.97B	621.40B	531.98B	434.27B	370.65B	371.42B
Stockholders Equity	131.97B	131.97B	110.78B	99.10B	87.95B	77.30B
Cash Flow
Free Cash Flow	0.00	-90.31B	-85.69B	-65.30B	15.86B	4.35B
Operating Cash Flow	0.00	-89.85B	-84.86B	-65.04B	18.62B	4.50B
Investing Cash Flow	0.00	9.31B	889.00M	6.68B	-16.78B	-2.43B
Financing Cash Flow	0.00	78.21B	87.54B	58.90B	-2.00B	-1.22B

Sundaram Finance Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5250.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SUNDARMFIN, the sentiment is Positive. The current price of 5250.65 is above the 20-day moving average (MA) of 5166.06, above the 50-day MA of 4992.09, and above the 200-day MA of 4873.90, indicating a bullish trend. The MACD of 41.06 indicates Negative momentum. The RSI at 60.22 is Neutral, neither overbought nor oversold. The STOCH value of 77.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:SUNDARMFIN.

Sundaram Finance Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MAHABANK	71 Outperform	₹504.34B	7.79	―	2.60%	18.36%	14.53%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
MOTILALOFS	65 Neutral	₹475.10B	23.41	―	0.57%	-14.24%	-40.53%
SUNDARMFIN	62 Neutral	₹583.41B	29.35	―	0.71%	15.31%	25.88%
MFSL	59 Neutral	₹560.50B	337.99	―	―	-16.19%	-53.19%
IFCI	55 Neutral	₹155.92B	38.45	―	―	-12.62%	175.71%
LICHSGFIN	55 Neutral	₹285.43B	5.17	―	1.87%	4.79%	13.08%

Sundaram Finance Limited Corporate Events

Sundaram Finance Engages with Bajaj Finserv Mutual Fund

Sundaram Finance Limited announced that its Managing Director, Mr. Rajiv C. Lochan, and Chief Financial Officer, Mr. M. Ramaswamy, engaged in a video conference with Bajaj Finserv Mutual Fund to discuss the company’s business performance. The meeting was conducted in a Q&A format, ensuring no unpublished price-sensitive information was disclosed, reflecting the company’s commitment to transparency and regulatory compliance.

Sundaram Finance Engages with Institutional Investor on Performance Insights

Sundaram Finance Limited recently held a one-on-one meeting with Wellington Investment Management, an institutional investor, to discuss the company’s performance for the quarter and half-year ending September 30, 2025, as well as its current business performance following the implementation of GST 2.0. The interaction was conducted in a Q&A format, and the company confirmed that no unpublished price-sensitive information was shared during the meeting.