Sundaram Finance Reports 21% Rise in Q2 Net Profit; Chairman S Viji Steps Down After 21 Years

Sundaram Finance Ltd (SFL) announced its financial results for the second quarter of the fiscal year, reporting a 21 percent growth in standalone net profit to ₹475 crore for the quarter ended September 2026 (Q2FY27). The company's performance was supported by strong disbursement growth and an improvement in asset quality.

During the quarter, disbursements grew by 28 percent to ₹10,355 crore. The non-banking financial company (NBFC), which primarily focuses on vehicle finance, reported that its Assets under Management (AUM) grew 19 percent year-on-year to reach ₹65,992 crore. On a consolidated basis, net profit for the quarter rose 6 percent to ₹517 crore, while Profit After Tax (PAT) for the first half of the fiscal year (H1FY27) increased by 20 percent to ₹1,153 crore. Consolidated figures include results from Sundaram Home Finance, Sundaram Asset Management, and the joint venture Royal Sundaram General Insurance.

Asset quality metrics showed improvement, with Gross Stage-3 assets standing at 1.84 percent in September 2026 compared to 2.03 percent in the previous year. Net Stage-3 assets closed at 0.91 percent, down from 1.13 percent in the corresponding period last year.

SFL Managing Director Rajiv Lochan noted that the industry experienced strong growth despite macroeconomic challenges, with double-digit growth seen in the categories where SFL lends. He highlighted that the used vehicle segment performed well, accounting for 30 percent of total disbursements in H1FY27. Looking ahead, Lochan stated that the outlook for the second half of the year remains constructive, though external factors such as geopolitical tensions, monetary policy directions, and the impact of a below-normal monsoon on sentiment require monitoring. Executive Vice-Chairman Harsha Viji added that these metrics were achieved against a backdrop of tight global financial conditions, crude oil price volatility, and regional tensions.

In a major leadership transition, the board announced that S. Viji has stepped down as Non-Executive Director and Chairman after serving in the role for 21 years, citing age and personal considerations. The board elected independent director R. Venkatraman as the new Chairman. Venkatraman, former head of KPMG India's consulting practice with over four decades of management consulting experience, becomes the first person outside the TSF family to hold the position.

Additionally, to simplify the corporate group structure, the board approved the acquisition of the entire shareholding in Sundaram Alternate Assets Ltd (SAAL) from Sundaram Asset Management Company Ltd (SAMCL) for ₹75 crore. This transaction makes SAAL a direct subsidiary of SFL rather than a step-down subsidiary. SAAL recorded a revenue of ₹99 crore and a profit of ₹21 crore for H1FY27.

Following the announcements, shares of SFL closed the trading day down 2 percent at ₹3,975 on the National Stock Exchange (NSE).

"Sundaram Finance's Q2 performance demonstrates strong resilience in its core vehicle finance operations, supported by disciplined asset quality management and strategic focus on the used vehicle segment. Furthermore, the leadership transition to an independent chairman outside the promoter family marks a notable milestone in corporate governance for a long-standing financial institution. Internal restructurings aimed at simplifying group structures, such as bringing Sundaram Alternate Assets directly under the parent company, reflect a pragmatic approach to operational clarity." — Dr. Shishir Gupta, Founder & CEO, StartupLanes