Chennai-based non banking finance company Sundaram Finance Ltd is expecting a tough market in near future, considering the current uncertainty in the economy coupled with other challenges, said the company management.
Speaking to reporters here, T T Srinivasaraghavan, managing director, Sundaram Finance Ltd, said, “The 12 months starting from April 1, 2012 seems very much challenging with uncertain macro environment. Most of the key parameters which indicates growth are far from encouraging and appears rather risky.” The company management abstained from giving out outlook for the current fiscal, commenting that the year ahead seems uncertain.
The global uncertainty, which is now playing in the domestic market as well, the current account deficit and liquidity issues, the weakening of Rupee and inflation are discouraging to the auto industry, as any other industry at present.
Impact of sharp increase in petrol price in the car and two wheeler segment also has to be watched out, he added. The overall market sentiment is not good for the industry and the company would not be giving out any outlook for this year, he added.
In the commercial vehicle segment, there is a rebalancing happening, where the light commercial vehicle (LCV) and small commercial vehicles are growing along with the heavy commercial vehicle segment which offers capacity of around 25 tonne. However, market for medium commercial vehicle, of 16 tonne vehicles is shrinking dramatically, he added. Majority of the company's disbursements are into commercial vehicle segment.
Sundaram Finance Ltd has posted a net profit of Rs 98.21 crore for the fourth quarter ended March 31, 2012, compared to Rs 59.35 crore for the same period of previous fiscal, registering an increase of 65.67%. The income from operations stood at Rs 467.71 crore for the quarter, compared to Rs 380.12 crore for the corresponding period of last year, an increase of 23%.
However, the company officials said that in the fourth quarter of 2010-11 had a one-time exceptional amount of Rs 38.85 crore on account of profit on sale of shares by its subsidiary company, Sundaram Finance Distribution, thus making a total of Rs 98.20 crore net profit for the quarter ended March 31, 2011, according to the balance sheet.
The disbursements for the quarter ended March 2012, registered a growth of 31%, from disbursements registered at Rs 2,702 crore for the quarter compared to Rs 2,066 crore for the same period of last fiscal year.
Almost 84% of the disbursements for the year - which were at Rs 9,307 crore with 25% increase from the previous years' disbursements of Rs 7,475 crore - comes from commercial vehicles and car segments. The rest is from tractor business and construction equipment business. The construction equipment and tractors segment has crossed Rs 1,000 crore.