In an interview with CNBC-TV18, Subhasri Shriram, the executive director of Shriram City Union Finance is positive that the two-wheeler industry will see 20-30% growth in the next six months.

Shriram is reasonably sure that a margin of 11-12% is sustainable for the next six-nine months.

Below is an edited transcript. Watch the accompanying video for more.

Q: You had a good second quarter in terms of your gold loan and retail business. Do you think the second half will be as good as to get a 50% rise in your loan growth?

A: Yes. We still expect if not 50% we should do close to 40% upwards where we should see growth in the loan book and results together.

Q: What about financing for two-three and four-wheelers, your personal loans, in that segment what was your growth in the first half? What are you seeing in the second half where there appears to be a slowdown in the industry?

A: Irrespective of the industry, as a company, the focus has been largely in small enterprise finance. It’s more also to do with gold loans considering the market conditions at this point of time. Personal loan is not a focused product for us and because of auto loans - two-wheelers, three-wheelers and four-wheelers the two-wheeler is doing pretty good considering oil and other concerns. Our business in that segment is doing very well. In the next six months, we should see a 20-30% growth in that product also.

Q: Re-pricing of your loan book helped support your margins. Do you expect to maintain them? On asset quality, your gross NPLs are at 1.7%. Do you think that rate is sustainable?

A: In terms of margins we had a lag effect since we almost had the entire book on unfixed lending rates. In the last two quarters we are seeing the benefit of interest rates rise which we have done in the last six-nine months. Yes, we are very well covered in terms of margins. Our loan book is almost fixed for the next one-one and half years, almost 78% of the loan book is interest rate fixed for the next 12 months.

We are reasonably sure that a margin of 11-12% is sustainable for the next six-nine months. In terms of asset quality, I don’t think we are seeing any stress at this point in time. Consistently, in the last three-four quarters we have been improving our NPA levels, including our asset coverage. This should be there at least for the next two quarters.