Sundaram Finance (SUF IN) – Q1FY27 Result Update – AUM growth picks up; NIMs remain range-bound – ACCUMULATE
Published on 04 Aug 2026
Q1FY27 has seen a pick-up in disbursement growth (+22% YoY) with continued improvement in economic activity even amidst West Asia conflict. Q1 AUM grew 17% YoY to INR 622.8bn and we build a run-rate of 17%/16% for FY27/28E. Calculated NIM compressed QoQ to 5.43%; we expect it to remain range-bound in FY27/FY28E at 5.4%/5.5%; lower yield to be offset by a controlled CoF. Asset quality trend saw a deterioration in Q1 (GS3/NS3 at 1.71%/ 0.88%) and we build a credit cost of 77/82bps in FY27/28E. We slightly tweak our FY27/ FY28E estimates upward factoring in pick up in growth and controlled CoFs & opex. We value SUF’s standalone business at INR4,149 (2.7x ABV vs. 2.6x earlier) and assign a value of INR1,152 to subsidiaries with a 20% holding company discount to arrive at TP of INR5,070. Maintain ACCUMULATE.
