Large-Cap NBFC Stock Okays Rs 14/Share Dividend: Buy To Be Eligible?

Large-cap NBFC Sundaram Finance has a market valuation of around Rs 43,000 Cr. Based in Chennai, Sundaram Finance Limited is an Indian provider of investment and financial services. The company announced its Q3 earnings as well as a 140% interim dividend for FY24. Let's find out if you should purchase the stock in order to be eligible for the dividend amount, as the stock has caught the attention of market observers.

Sundaram Finance Dividend

"The Board of Directors, at their meeting held today, declared an Interim Dividend of Rs 14/- per share (140%) for the financial year 2023-24 on the paid-up capital of Rs 111.10 cr. represented by 11,11,03,860 equity shares of Rs 10/- each, payable to those shareholders whose names appear on the Register of Members of the Company as on the Record Date, viz., 16th February 2024 (Friday). The dividend will be paid on 1st March 2024 (Friday)," said Sundaram Finance in a stock exchange filing.

Sundaram Finance Financials

The firm said that compared to Rs. 5,653 crores in Q3FY23, its disbursements for Q3FY24 jumped by 15% to Rs. 6,524 crores in Q3FY24. As of December 31, 2023, the assets under management were at Rs. 42,172 crores, up 26% from Rs. 33,558 crores in the year-ago quarter. Net interest income jumped by 17% for the quarter ended December 31, 2023, compared to the same period in FY23. According to the RBI's revised asset categorization guidelines for NBFCs, the Gross and Net NPA are 2.61% and 1.82%, respectively, as opposed to 3.97% and 2.78% as of December 31, 2022. With a net profit of Rs. 300 crores in Q3FY24 compared to Rs. 243 crores in Q3FY23, profit after tax increased by 24%.

"Q3 activity in the automotive space was well below expectations of the festival period, with several asset classes declining year-on-year and others growing in single digits. Despite this, team Sundaram has delivered a tremendous performance and we have struck a terrific balance between growth, asset quality and profitability. Q4 is off to an auspicious start but prospects will be influenced by the upcoming general elections in April-May and related events. We will continue to focus on extending our market share across all asset classes and geographies we operate in and on delivering the Sundaram experience to our customers, our people and other stakeholders," said Rajiv Lochan, Managing Director.

"Team Sundaram has delivered a strong nine months and Q3 of FY24 despite lower-than-expected economic activity in the quarter. Assets under management grew by 26% to a new high of Rs. 42,172 crores, net stage 3 assets closed at 1.02% and profit after tax recorded a 23% growth to Rs. 948 crores over the prior year period. Our Group companies in asset management, general insurance and home finance have continued their trajectory from FY23 and recorded strong results. We continue to rely on our time-tested approach of steady and sustainable growth with best-in-class asset quality and consistent profitability," said Harsha Viji, Executive Vice Chairman.

Sundaram Finance Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said SUNDARMFIN, currently trading at 3747 levels, is exhibiting a sideways trading pattern within the range of 3500 - 3800 for the past 2 months. This consolidation suggests a period of indecision or equilibrium in the market.

The lower end of this range, around 3500, serves as a strong support level and aligns with the 50-Day Exponential Moving Average (EMA). This confluence enhances the significance of this support level, indicating a potential bounce when the price approaches it.

There's a minor resistance observed near the upper end of the range, around 3850 levels. A successful breach of this resistance may pave the way for an upward movement towards the next resistance at 4000 levels. This presents a potential opportunity for traders.

Currently, SUNDARMFIN is trading above its long term (200 Day) and Medium term (50 Day) EMA levels, signalling strength in its trend. The momentum indicator RSI is at 63 levels, indicating a neutral position. This suggests a balanced market sentiment without a clear bias towards overbought or oversold conditions.

For investors holding from lower levels, it's advisable to trail their stop loss at the lower end of the range, around 3500. This approach helps protect gains while allowing for potential upside.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.