Sundaram Finance Limited Intrinsic Value
SUNDARMFIN · Financial Services · Current price ₹4,235.4
Is Sundaram Finance Limited undervalued?
We estimate the fair value of Sundaram Finance Limited at ₹3,575 per share, against a market price of ₹4,711. That puts the share price about -24.1% above our estimate, at low confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Fair multiple (P/E) (₹4,120), Residual income (excess return on book) (₹2,318). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Sundaram Finance Limited spans ₹2,318 to ₹4,120. That range is wide, which is the honest signal here: read the range rather than the single number. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Margin of safety
Value investors look for a margin of safety: a discount to estimated value that absorbs being wrong. At ₹4,711 against an estimated value of ₹3,575, Sundaram Finance Limited trades at -24.1%, i.e. a premium to our estimate. How much margin to demand depends on how much you trust the inputs, which is what the confidence band below is for.
How we got this fair value
Every number below is part of the same estimate for Sundaram Finance Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹2,318 – ₹4,120
Why this method for this business
Relative P/E and residual income models are most appropriate for Sundaram Finance, a financial services company with a stable earnings profile and a focus on book value and return on equity.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
Book value plus the present value of returns earned above the 10.6% cost of equity
- dcf: Not suitable for a financial institution with high leverage and uncertain cash flows
- relative_pe: Already used as the primary model
What was missing
- Lack of forward EPS estimates
- Limited analyst coverage
What drives it
20 inputs, grouped by how strong each claim is
- Sector-median P/E
- 25.79×
- Peers used
- 6
- EPS (TTM)
- 199.81 ₹/share
- Own-history median P/E
- 23.61×
- ROE (normalized)
- 15.7%
- Book value / share
- 1,341 ₹
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
computed
reported
- Cost of equity
- 10.6%
building-block
- Term: quality
- -7.0%
- Term: growth
- +4.2%
- Term: capital_allocation
- -4.9%
- Term: financial_strength
- -12.0%
- Term: history
- -2.5%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
- Moat
- Narrow
- Excess-return horizon
- 10 yrs
quality 41/100 (weak/erratic returns) → discount
durable ~12% CAGR (ROCE 9% < 12% hurdle (growth not value-accretive)) → premium
capital allocation: falling ROCE / weak cash generation → discount
financial strength: high leverage (D/E 4.7) → discount
history: market paid -8% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
computed
computed
- Premium vs sector
- -20.0%
- Fair-multiple confidence
- 78%
- Fair P/E
- 20.62×
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Sundaram Finance Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Sundaram Finance Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.