Sundaram Finance Holdings Ltd. (SF Holdings) has registered a consolidated net profit of Rs. 33.63 crores for the quarter ended 31st December 2021, an increase of 22% over the Rs. 27.65 crores for the corresponding period of the previous year. Consolidated profit for the 9 months ended 31st December 2021 went up 128% to Rs. 84.49 crores, as compared to Rs. 37.06 crores registered in the corresponding period of the last financial year.
SF Holdings primarily operates as a holding company owning a portfolio of automotive businesses including foundries, wheels, brakes, turbo chargers, axles, and distribution of spare parts. As a result, dividend from portfolio companies forms a substantial part of the financial results. Dividend received from portfolio companies was at Rs. 29.38 crores for the period ended 31st December 2021, as against the total dividend of Rs. 14.13 crores received during the financial year 2020-21.
Divests select holdings
During the quarter ended 31st December 2021, SF Holdings sold a 1.50% stake held in Sundaram Clayton Ltd. for a total gain of Rs. 124.66 crores, bringing its stake down to 9.74%. As per Ind AS practice, the realized gain has been accounted through OCI.
Using the proceeds of the divestments, the Board of SF Holdings has declared a Special Dividend of 20%.
Further investment in carbon fibre
During the quarter ended 31st December 2021, SF Holdings made further investments in its composites business. It made a follow-on investment of Euro 2 million in Mind S.r.l., Italy, which focuses on carbon fibre components for the automotive industry in Europe. Prior to this, over the previous 18 months, SF Holdings had already invested Euro 2.60 million in Mind S.r.l. The company now has a 48.86% stake in the Italian firm. It has also promoted a green-field operation to manufacture carbon fiber components in Tiruvallur District, Tamil Nadu, India, with an initial investment of Rs. 19.50 crores in Sundaram Composite Structures Private Ltd.