Sundaram Finance Ltd reported a 22% year-on-year increase in standalone net profit for the first quarter of FY27, driven by healthy loan disbursements, robust growth in assets under management (AUM) and continued improvement in asset quality.
The Chennai-headquartered non-banking financial company (NBFC) posted a profit after tax (PAT) of ₹522 crore for the quarter ended June 30, 2026, compared with ₹429 crore in the corresponding quarter last year.
Net interest income (NII) rose 19% to ₹925 crore from ₹781 crore a year earlier, reflecting sustained growth in its lending business.
Strong loan growth
Sundaram Finance reported 22% growth in disbursements during the quarter at ₹8,947 crore, compared with ₹7,310 crore in Q1 FY26.
The company’s assets under management (AUM) increased 17% to ₹62,275 crore as of June 30, 2026, from ₹53,278 crore a year ago, supported by steady demand across its financing businesses.
Asset quality improves
The lender continued to strengthen its balance sheet with further improvement in asset quality.
Gross Stage 3 assets declined to 1.71% as of June 30, 2026, from 1.91% a year earlier, while Net Stage 3 assets improved to 0.88% from 1.08%.
Under the Reserve Bank of India’s NPA classification norms for NBFCs, the company’s gross NPA improved to 2.28% from 2.66%, while net NPA declined to 1.35% from 1.71% during the same period.
Provision coverage on Gross Stage 3 assets also strengthened to 49%, compared with 44% a year ago.
Profitability remains healthy
Return on Assets (ROA) improved to 3.06% in Q1 FY27 from 2.91% in the year-ago period, while Return on Equity (ROE) increased to 17.69% from 16.70%.
The company’s Capital Adequacy Ratio stood at 18.5%, with Tier-I capital at 16.9%, providing adequate capital to support future growth.
The cost-to-income ratio was 30.70%, compared with 29.84% in the corresponding quarter last year.
Delivers strong growth
Sundaram Finance Managing Director Rajiv Lochan said the company delivered stronger growth despite an uncertain external environment.
“Q1 FY27 has been an encouraging quarter, with Sundaram Finance delivering stronger growth, improved asset quality and resilient profitability. The operating environment is turning more supportive for growth, even as key external monitorables such as geopolitical uncertainty and monsoon shortfalls remain. With our strong franchise, disciplined execution and customer-focused approach, Team Sundaram is well-positioned to deepen its presence and gain market share across the businesses in which we operate,” he said.
Robust demand
Executive Vice Chairman Harsha Viji said demand remained stronger than the corresponding quarter last year despite macroeconomic headwinds.
“Q1 FY27 opened with stronger demand than Q1 FY26, despite a more complex macro backdrop marked by West Asia tensions, higher energy and commodity prices, supply-chain disruption and monsoon uncertainty. In this environment, Team Sundaram delivered 17% AUM growth to ₹62,275 crore, improved asset quality with net Stage 3 assets at 0.88% against 1.08% last year, and 22% year-on-year growth in profit after tax,” he said.
He added that the group’s asset management, general insurance and home finance businesses also delivered strong performances during the quarter, while reiterating the company’s commitment to sustainable growth, superior asset quality and consistent profitability.