• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

G. Madhan

INVESTORS can park their money in the fixed deposit programme of Sundaram Home Finance. The company's fundamentals are strong and the interest rates are higher than that of housing finance companies such as HDFC.

The interest income on deposits is also eligible for a tax break under Section 80 L. Hence, an investment up to three years can be considered. Longer tenures, however, can be avoided.

Those who prefer to lock-in their money for longer periods can consider the post-office monthly income scheme, as it offers higher returns.

Scheme features: Sundaram Home offers both cumulative and non-cumulative schemes. Under the latter, the interest (see table for rates) is paid at monthly, quarterly and yearly rests. The monthly scheme is only available for three-year tenors.

The minimum deposit amount for the monthly option is Rs 20,000; for all other schemes, it is at Rs 10,000. Under the cumulative scheme, the interest is compounded annually. Hence, the yield for the same is 6.25 per cent for one year, 6.71 per cent for two years and 7.22 for three years. Further details can be got from the company's registered office at 21, Patullos Road, Chennai-600002.

Business prospects: Sundaram Home Finance provides housing loans for individuals and corporates. The focus, however, is predominantly on retail loans.

Given the robust demand for dwelling units, low interest rates and the various tax waivers offered by the Government, the company has good prospects for growth, as far as disbursements go.

However, this may not necessarily lead to an improvement in the earnings, given the intense competition in this segment.

Financials: The company disbursements in 2003-04 rose 56 per cent to Rs 370 crore over the previous year.

The operating income grew 37 per cent to Rs 55.5 crore. Net profit also grew by 25 per cent to Rs 5.6 crore. The net profit margin was down by one percentage point to 10 per cent.

The capital adequacy ratio, as on March 2004, stood at 17.4 per cent as against the minimum requirement of 12 per cent. The gross non-performing loans were 1.78 per cent of the total loan portfolio.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Investment Quiz

Copyright © 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line