01 — At a Glance
The Boring Finance Company That Prints Money Like It’s Going Out of Style
- 52-Week High / Low₹5,642 / ₹4,200
- 9MFY26 Revenue (9 Months)₹5,373 Cr
- 9MFY26 PAT (9 Months)₹1,226 Cr
- TTM EPS₹185.21
- TTM P/E28.9x
- Book Value₹1,362
- Price to Book3.93x
- Dividend Yield0.65%
- Debt / Equity4.35x
- Interest Coverage1.59x
The Setup: Sundaram Finance closed 9MFY26 with ₹5,373 crore revenue (+14.8% YoY), ₹1,226 crore PAT (+23% YoY), and AUM growth at 16% YoY to ₹58,236 crore. Gross Stage 3 assets at 1.91%—industry best. Cost-to-income improved to 28.72% from 31.37%. The company just declared 160% interim dividend (₹16/share). And yet the stock hasn’t moved proportionally to earnings. This is the quiet story of an NBFC that’s compounding at mid-teens growth rates while everyone obsesses over fintech and AI. Welcome to Sundaram Finance: seven decades of discipline, zero PR stunts.
02 — Introduction
The Finance Company No One Talks About (And That’s Fine By Them)
Sundaram Finance has existed since 1954. That’s 72 years of financing vehicles and dreams. No blockchain pivots. No “strategic repositioning” every quarter. No guidance misses followed by apology calls. Just steady, methodical cash generation across a disciplined product range: commercial vehicles (24% of AUM), cars (25%), construction equipment (11%), tractors (7%), home loans (33%), SME credit, leasing, and increasingly, asset management and insurance distribution.
The company operates through 748 branches across four regions (South 50%, North 26%, West 11%, East 7%), reaching 646,779 customers directly in retail finance and 57.85 lakh customers across the entire group (including insurance and asset management). Think of it as a hyperlocal lender with distribution depth in semi-urban India that most large banks still haven’t figured out.
Nine months into FY26, they’ve grown AUM 16% to ₹58,236 crore, expanded disbursements 13% to ₹24,270 crore, and posted 23% PAT growth to ₹1,226 crore. The cost-to-income ratio—a measure of operational efficiency—improved 265 basis points to 28.72%. Meanwhile, asset quality remains pristine: Gross Stage 3 at 1.91%, net NPA at 1.73% (vs. 2.46% and 1.62% a year ago). Collections running at 91% for current demand. This isn’t hype. This is execution in a rising rate environment.
New leadership took charge in FY26. Rajiv C. Lochan, formerly of McKinsey and The Hindu Group (IIT Madras, MIT, Columbia credentials), stepped in as Managing Director. Early signals: focus on cost efficiency, selective market expansion, and maintaining the credit discipline that has kept this institution’s stage 3 assets below 2% even through cycles. No strategic pivots. Just sharper operational execution.
The Real Story: A mid-sized NBFC generating 15%+ ROE while maintaining best-in-class asset quality, expanding 16% YoY, and returning cash to shareholders at 160% dividend payout—all while trading at P/E 28.9x. Most investors are hunting for 50x revenue SaaS companies. Sundaram is quietly becoming a ₹60,000 crore market cap institution.
03 — Business Model: WTF Do They Even Do?
They Lend Money. Across Multiple Products. And They’re Scary Good At It.
EduInvesting runs entirely on reader support — ₹360 a year keeps the lights on.
