Sundaram Finance profit rises 33.88% YoY, but margin slips sequentially
Lower costs relative to revenue lifted the year-on-year margin, while a lower tax rate also supported the 14.80% sequential increase in net profit.
Filed 03 Aug 2026, 14:22 IST · Sundaram Finance Ltd (SUNDARMFIN)
Key takeaways
- Consolidated net profit rose 33.88% YoY as revenue grew 12.57% while expenses increased only 3.80%.
- Sequentially, operating margin narrowed 0.70 percentage points to 78.06% because expenses grew 6.66%, faster than revenue at 3.27%.
- The 78.06% operating margin was 15.05 percentage points above the 63.01% median for 45 reported Financial Services peers.
Price around the results
Year-on-year profit growth outpaced revenue
Sundaram Finance’s consolidated net profit increased 33.88% YoY to Rs 636.19 cr, ahead of the 12.57% rise in revenue. Operating profit grew 15.30% as expenses rose 3.80%, allowing operating margin to expand 1.85 percentage points. Interest expense still increased 7.17%, but the tax rate fell 1.83 percentage points to 23.77%, adding to the profit growth.
Sequential margin pressure came from faster costs
Revenue grew 3.27% QoQ, while expenses increased 6.66%, narrowing operating margin by 0.70 percentage points. Interest expense rose 4.15%, adding to the pressure below operating profit. Net profit nevertheless rose 14.80% QoQ, helped by a 1.99-percentage-point decline in the tax rate.
Margin remains above peers despite two-quarter pullback
Operating margin has declined for two consecutive quarters from 79.76% in Q3FY26 to 78.76% in Q4FY26 and 78.06% in Q1FY27, though it remains above the 76.21% recorded in Q1FY26. The latest margin was 15.05 percentage points above the 63.01% median across 45 Financial Services companies that had reported. Other income contributed 9.17% of pre-tax profit, so part of the quarter’s earnings came from non-operating income.
Market reaction is not yet available for this result
The stock has not yet had a reported reaction to this quarter’s result. Across eight earlier result sessions, it rose five times and fell three times, with a median absolute move of 2.39%. The historical response has therefore been mixed rather than consistently directional.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,644 cr | ₹2,560 cr | +3.27% | +12.57% |
| Other income | ₹77 cr | ₹-6 cr | — | +13.26% |
| Expenses | ₹580 cr | ₹544 cr | +6.66% | +3.80% |
| Operating profit | ₹2,064 cr | ₹2,017 cr | +2.36% | +15.30% |
| Operating margin (%) | 78.06% | 78.76% | — | — |
| Interest | ₹1,247 cr | ₹1,197 cr | +4.15% | +7.17% |
| Depreciation | ₹60 cr | ₹67 cr | -11.12% | +6.57% |
| Profit before tax | ₹835 cr | ₹746 cr | +11.79% | +30.65% |
| Tax | ₹198 cr | ₹192 cr | +3.13% | +21.29% |
| Net profit | ₹636 cr | ₹554 cr | +14.80% | +33.88% |
| EPS (₹) | ₹57.71 | ₹50.28 | +14.78% | +33.84% |
Operating margin of 78.06% compares with a Financial Services sector median of 63.01% across 45 peers that have reported Q1FY27.
What to watch
- Whether operating margin recovers from 78.06% after two consecutive sequential declines.
- Whether expenses continue to grow slower than revenue, as they did YoY at 3.80% versus 12.57%.
- Whether other income remains a similar share of pre-tax profit after contributing 9.17% in Q1FY27.