Sundaram Finance Ltd (SUNDARMFIN) Q2 FY27 Results Analysis: Standalone PAT Jumps 20.51%, Royal Sundaram JV Swings to Loss
Sundaram Finance Ltd's Q2 FY27 numbers came in mixed, with revenue of Rs. 2,737.55 Cr (+14.75% YoY) and PAT growth of +5.85% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 04, 2026 |
|---|---|
| Revenue (Q2) | Rs. 2,737.55 Cr (+14.75% YoY) |
| PAT (Q2) | Rs. 516.66 Cr (+5.85% YoY) |
| EPS (Q2) | Rs. 46.88 (+5.85% YoY) |
Quarter Snapshot
Core lending franchise delivered 15.47% consolidated loan growth with NII up 21.02% YoY and positive funding jaws (finance cost +11.74% vs interest income +15.60%), while standalone PAT grew 20.51% YoY. The drag is concentrated in the Royal Sundaram JV, which swung to a Rs.(40.58) Cr loss from +Rs.67.33 Cr in Q1, and in rising provisions (+29.61% YoY) with Gross Stage 3 slipping to 1.84% from 1.71% QoQ. No quantified management guidance exists in the source, so no guidance beat can be established; asset quality YoY improvement and CAR stabilization at 18.52% are the key watch items.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue/demand "likely ahead" on record auto volumes | Directionally ahead | Standalone revenue from operations +18.40% YoY; consolidated +14.75% | Played out |
| Margins "broadly flat, mild funding-cost pressure at the exit" | Flat | Positive YoY jaws (int. income +15.60% vs fin. cost +11.74%); operating margin up YoY, down QoQ (53.19%→51.88%) | Played out YoY / Partially QoQ |
| Cost-to-income vs Q1 30.70% print | Compression risk | Q2 management-basis value not in filing; filing-basis opex ratio stable QoQ | Not observable on management's basis |
| Asset quality: GS3 vs 1.71%, CAR vs 18.49% | Watch | GS3 1.84% (slipped); CAR 18.52% (held) | Partially |
| Royal Sundaram as consolidated swing | Watch | JV share −Rs.40.58 Cr vs +Rs.67.33 Cr in Q1 | Played out |
| Growth sustainability: disbursements/AUM pace | Watch | AUM/disbursements not disclosed in the filing; loans +15.47% YoY consolidated as proxy | Not observable directly; proxy positive |
| Incremental Labour Codes charge | Watch | Nil exceptional in Q2/H1 FY27 — none booked | Played out |
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Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| "expect to maintain this trajectory" — market share across asset classes & geographies | Management commentary, Q1 FY27 results announcement | Standalone loans +17.29% YoY; Asset Financing revenue +14.28% YoY | On Track |
| "continued improvement" in collections | Management commentary, Q1 FY27 results announcement | Gross Stage 3 1.84% vs 1.71% QoQ (2.03% year-ago) — better YoY, slipped QoQ | Partially delivered |
| "prudent focus on asset class mix… to optimize margin" | Management commentary, Q1 FY27 results announcement | Finance cost +11.74% YoY vs interest income +15.60% YoY; operating margin 51.88% vs 50.32% YoY | On Track |
| GST-reform easing of cashflow stress (H2 FY26 thesis) | Management commentary, Q3 FY26 results announcement | Not directly observable in this filing | Too Early |
| No further Labour Codes exceptional after FY26 | Note 5 to the Q1 FY27 results | Exceptional line nil in Q2/H1 FY27 | Met |
Key Numbers, Quarter by Quarter
| Metric | Q4 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|
| AUM (Rs. Cr) | 59,908 | 62,275 | not in filing |
| Disbursements (Rs. Cr) | 8,051 | 8,947 | not in filing |
| NII (Rs. Cr) | 901 | 925 | not in filing (filing-derived: 841.86 standalone) |
| Cost-to-income | 28.71% | 30.70% | not in filing |
| ROA | 3.03% | 3.06% | not in filing |
Key Investment Insights
Key Positives
- Consolidated loans grew 15.47% YoY to Rs.79,181.70 Cr; standalone loans grew 17.29% YoY to Rs.61,950.94 Cr
- Consolidated NII (filing-derived) grew 21.02% YoY to Rs.1,015.73 Cr; standalone NII grew 18.52% YoY
- Consolidated PPOP grew 16.92% YoY to Rs.978.35 Cr; standalone PPOP grew 22.97% YoY to Rs.833.40 Cr
- Finance cost grew 11.74% YoY vs interest income +15.60% — positive jaws; Reg. 52(4) operating margin 51.88% vs 50.32% YoY
- 'Others' segment result grew 38.62% YoY with margin expanding ~564 bps YoY to 42.93%
- Gross Stage 3 at 1.84% remains below the year-ago 2.03%; Net Stage 3 at 0.91% vs 1.13% a year ago
- Standalone PAT grew 20.51% YoY to Rs.475.07 Cr; EPS Rs.42.76 vs Rs.35.48
- No incremental Labour Codes exceptional in Q2/H1 FY27
Risk Factors
- Share of insurance JV (Royal Sundaram) swung to a loss of Rs.(40.58) Cr from +Rs.67.33 Cr in Q1 — a Rs.107.91 Cr adverse swing QoQ, dragging consolidated PAT (owners) growth to +5.85% YoY
- Standalone Gross Stage 3 rose to 1.84% from 1.71% QoQ and 1.44% at Mar-26
- Consolidated provisions rose 29.61% YoY; standalone provisions rose 48.52% QoQ to Rs.161.66 Cr
- CAR declined YoY to 18.52% from 19.27%, and D/E rose to 4.36 from 4.00 a year ago
- Employee costs grew 20.43% YoY, outpacing revenue growth; filing-basis opex ratio crept to 16.62% from 16.16% a year ago
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