The Hindu : SFL net up, to pay 75 p.c.

Online edition of India's National Newspaper
Friday, Jun 13, 2003

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Business

SFL net up, to pay 75 p.c.

By Our Special Correspondent

CHENNAI JUNE 12. Even as it is set to celebrate the 50th year of operations on August 11, city-based Sundaram Finance (SFL) has announced a 15 per cent golden jubilee dividend in addition to the 60 per cent normal dividend recommended for the year ended March 2003.

The total dividend of 75 per cent is expected to involve a pay out of Rs. 20.30 crores (including the dividend tax) for the company. Last year, it paid a dividend of 60 per cent.

SFL has reported a net profit of Rs. 45.66 crores for the year ended March 2003, up from Rs. 40.36 crores in the preceding year. The gross income for the just ended year stands at Rs. 476.06 crores (Rs. 467.64 crores). The net worth of the company has gone up to Rs. 486.57 crores up from Rs. 435.67 crores in the previous year. A part of this increase is caused by the transfer of surplus worth Rs. 25.54 crores that arose following the merger of Fiat Sundaram Auto Finance with the company.

During the year gone by, SFL has seen a growth of over 25 per cent in hire purchase and loan disbursements. Gross disbursements have touched Rs. 1,532 crores (Rs. 1,220 crores). The company, says a release, has `maintained a healthy market share' in the commercial vehicle segment.

According to Srinivasa Raghavan, Joint Managing Director, SFL has a 10 per cent market share in the civilian commercial vehicle segment. Out of the total disbursal, 58 per cent has gone into commercial vehicle segment (same as last year) and 33 per cent to cars (34 per cent). The balance has flowed into other segments.

Gross receivables of the company have crossed Rs. 2,650 crores (Rs. 2,250 crores). The capital adequacy ratio stands at 17.29 per cent as against the statutory requirement of 12 per cent.

The standard assets of the company stand at 96.62 per cent (95.29 per cent) and the net non-performing assets at 1.45 per cent (2.37 per cent) of total business assets.

The company has made provisions and write off to the extent of Rs. 42.42 crores (Rs. 29.75 crores).

Addressing a press conference here today, Mr. Srinivasa Raghavan said SFL would post a `health growth' in the current year. Though sales of commercial vehicles went through the roof last year, he was not convinced that those buying were necessitated by any real need for commercial vehicles. The buying-spree, he reckoned, was caused by a combination of other factors. Hence, he wasn't quite sure if the same sale momentum could be sustained this year. Nevertheless, he asserted that SFL would maintain its market share in the civilian commercial vehicle segment this year.

He asserted that the quickly metamorphosing road transportation segment offered huge potential for companies like his.

G. K. Raman, Managing Director of the company, had sort of indicated that SFL would strive to peg deposits at around 35 per cent of the total borrowings. He said SFL would broadbase its borrowings. In this context, Mr.Srinivasa Raghavan said SFL was looking at "ECB (external commercial borrowing) option".

The company has informed the stock exchange authorities that Mr. Srinivasa Raghavan will become the Managing Director of SFL on August 11. Mr. Raman will continue to be a whole-time director of SFL.

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