Sundaram Finance (SUF IN) – Q4FY26 Result Update – AUM growth picks up; credit cost normalizing – Accumulate
Published on 26 May 2026
Q4FY26 has seen a pick-up in disbursement growth (+17% YoY) with continued improvement in economic activity following GST 2.0 reforms. Q4 AUM grew 16% YoY to Rs 599.1bn and we build a run-rate of 14/15% for FY27/28E. Calculated NIM was flat QoQ to 5.61%; we expect it to remain steady in FY27/FY28E; lower yield to be offset by a controlled CoF. Asset quality trend improved (GS3/NS3 at 1.44%/ 0.69%) aided by strong collections, improved recoveries and tighter origination standards. We slightly tweak our FY27/ FY28E estimates factoring in stable NIM and normalized credit cost. We roll-forward to FY28, valuing SUF’s standalone business at Rs3,978 (2.6x ABV vs. 2.9x earlier) and assign a value of Rs1,152 to subsidiaries with a 20% holding company discount to arrive at TP of Rs4,900. Maintain ACCUMULATE.
