Sundaram Finance Limited (SUNDARMFIN) AI Stock Analysis

• Market Cap: ₹555.19B
• Dividend Yield: 0.71%
• Average Volume (3M): 2.07K
• Price to Earnings (P/E): 26.9
• Beta (1Y): 1.09
• Revenue Growth: 15.31%
• EPS Growth: 25.88%
• Country: IN
• Employees: 5,059
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 36.26
• 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: ₹6,200.00
• Price Target Upside: 18.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 161.72
• Revenue Forecast (FY): ₹40.01B

• Rating: 62 Neutral
• Price Target: ₹5,378.00 ▲(2.43% Upside)
• Action: Reiterated Date: 10/31/25
• Date: Action: Reiterated 10/31/25

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

Consistent Revenue Growth

Sustained top-line growth (13.9%/16.5% in latest year) indicates expanding loan originations and market demand for vehicle and asset-backed finance. Durable revenue expansion supports scale benefits, fee income diversification and the capacity to absorb cyclical credit shocks over months.

High Gross and EBIT Margins

Very high gross and EBIT margins point to operational efficiency and low direct operating costs in core lending services. Persistent margin strength gives structural capacity to fund credit provisions and investments, supporting profitability resilience across economic cycles over several months.

Solid Return on Equity

ROE of ~14% shows effective use of shareholder capital to generate profits, implying disciplined lending and pricing. A durable ROE helps support internal capital generation, reduces frequent equity needs, and underpins long-term shareholder value if maintained alongside controlled leverage.

Negative Factors

High Leverage

A near 4x debt-to-equity ratio creates structural funding and interest-rate sensitivity for an NBFC whose business depends on market borrowing. Elevated leverage narrows buffers against credit losses, constrains financial flexibility and raises refinancing risk across medium-term funding cycles.

Weak Cash Flow Generation

Negative operating and free cash flows indicate a structural cash-generation gap versus accrual profits, forcing reliance on external funding or balance-sheet measures. For a lending franchise this undermines liquidity resilience and increases susceptibility to funding stress over the coming months.

Pressure on Net Profit Margin

Declining net margin despite strong gross margins suggests rising credit costs, higher funding expense, or operating pressure. If sustained, margin erosion reduces retained earnings, weakens capital build-up and limits the company’s ability to expand loan assets without raising 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 primarily makes money by lending and earning interest and fees on financing products. Its main revenue engine is net interest income: the company raises funds (e.g., via bank borrowings, debt securities, and other funding sources typical for NBFCs) and deploys this capital into loans—especially vehicle and asset finance—earning interest from customers; profitability depends on the spread between lending yields and its cost of funds, adjusted for credit losses. In addition to interest income, the company generates fee-based income from loan origination and servicing activities (such as processing fees and other contractual charges associated with financing). As an NBFC focused on secured/asset-backed lending, asset quality, recoveries, and residual value dynamics (where applicable) influence credit costs and therefore earnings. Specific material partnerships, segment-level revenue splits, and quantified contributions from subsidiaries/associates are null because they are not provided in the prompt and are not determinable here without referencing current company disclosures.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	90.60B	83.38B	69.78B	53.21B	50.30B	51.91B
Gross Profit	45.32B	42.14B	36.28B	29.53B	27.82B	25.32B
EBITDA	29.55B	26.70B	21.44B	18.50B	15.18B	14.23B
Net Income	19.72B	18.79B	14.36B	13.28B	11.73B	11.65B
Balance Sheet
Total Assets	822.16B	753.37B	642.76B	560.66B	481.54B	465.93B
Cash, Cash Equivalents and Short-Term Investments	17.30B	11.47B	15.03B	11.45B	2.06B	2.36B
Total Debt	570.03B	524.06B	443.52B	358.81B	302.07B	305.30B
Total Liabilities	670.87B	621.40B	531.98B	434.27B	370.65B	371.42B
Stockholders Equity	151.29B	131.97B	110.78B	99.10B	87.95B	77.30B
Cash Flow
Free Cash Flow	-30.89B	-90.31B	-85.69B	-65.30B	15.86B	4.35B
Operating Cash Flow	-30.64B	-89.85B	-84.86B	-65.04B	18.62B	4.50B
Investing Cash Flow	-11.99B	9.31B	889.00M	6.68B	-16.78B	-2.43B
Financing Cash Flow	41.55B	78.21B	87.54B	58.90B	-2.00B	-1.22B

Sundaram Finance Limited Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SUNDARMFIN, the sentiment is Negative. The current price of 5250.65 is below the 20-day moving average (MA) of 5317.43, below the 50-day MA of 5271.49, and above the 200-day MA of 4892.52, indicating a neutral trend. The MACD of -49.18 indicates Positive momentum. The RSI at 37.91 is Neutral, neither overbought nor oversold. The STOCH value of 13.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	₹493.18B	6.63	―	2.60%	18.36%	14.53%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
MOTILALOFS	65 Neutral	₹419.89B	22.71	―	0.57%	-14.24%	-40.53%
SUNDARMFIN	62 Neutral	₹555.19B	26.89	―	0.71%	15.31%	25.88%
MFSL	59 Neutral	₹575.65B	390.61	―	―	-16.19%	-53.19%
IFCI	55 Neutral	₹151.15B	-220.42	―	―	-12.62%	175.71%
LICHSGFIN	55 Neutral	₹275.88B	5.31	―	1.87%	4.79%	13.08%