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Shriram City Union Finance Ltd.

BSE: 532498 | NSE: SHRIRAMCIT |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE722A01011 | SECTOR: Finance - Leasing & Hire Purchase

BSE Live

Dec 02, 10:15
2130.00 20.40 (0.97%)
Volume
AVERAGE VOLUME
5-Day
5,308
10-Day
3,844
30-Day
2,220
188
  • Prev. Close

    2109.60

  • Open Price

    2118.85

  • Bid Price (Qty.)

    2130.00 (10)

  • Offer Price (Qty.)

    2132.95 (1)

NSE Live

Dec 02, 10:15
2131.60 18.90 (0.89%)
Volume
AVERAGE VOLUME
5-Day
105,772
10-Day
62,284
30-Day
40,677
10,637
  • Prev. Close

    2112.70

  • Open Price

    2119.00

  • Bid Price (Qty.)

    2130.25 (5)

  • Offer Price (Qty.)

    2132.30 (2)

Annual Report

For Year :
2016 2010 2009 2008 2007

Chairman's Speech

DEAR SHAREHOLDERS, Micro, small and medium enterprises contribute significantly to India''s inclusive socio-economic progress. The growth potential of this segment is immense, considering the size of the country; and its large proportion of young aspiring entrepreneurs. However, the absence of organised financiers with strong domain knowledge and restrictive standardised credit policy of banks (with overemphasis on statutory certified information) is hindering the growth of the MSME finance space. Providing the growth capital to this segment is therefore an attractive opportunity for us at Shriram City Union Finance (Shriram City). We have the domain knowledge and our lending model is based on our long-standing relationships with customers. We are largely inspired by a sense of community; and we are committed to handhold small entrepreneurs, who have a proven track record of performance. Our business is also aligned to the Government''s ''Make in India'' initiative, which aims to encourage more entrepreneurs to compete across India''s vast markets as well as the global level. At Shriram City, we are tapping into the vast potential of the small enterprises finance space; providing growth capital to entrepreneurs, who find it difficult to deal with unscrupulous money lenders on the one hand; and highly organised banks on the other. We are leveraging our existing customer base, as well as those of the Shriram Group as a whole. Encouraging Performance FY 2015-16 was another successful year at Shriram City. Niche focus on the small enterprises finance space and considerable presence in the two wheeler segment have stood us in good stead. Our Assets Under Management (AUM) grew by 17% from Rs.16,717 Crores in 2014-15 to Rs.19,576 Crores in 2015-16, on account of proactive marketing initiatives and customer connect programmes. Our total income grew by 10% from Rs.3,482 Crores in 2014-15 to Rs.3,835 Crores in 2015-16. Our profit before tax declined marginally by 4% from Rs.841 crore in 2014-15 to Rs.807 Crores in 2015-16. At the same time, our net profit decreased by 5% from Rs.558 Crores in 2014-15 to Rs.530 Crores in 2015-16. Migrating to the RBI''s more stringent non-performing asset (NPA) recognition norms has impacted our profitability. We had to make an additional provision (inclusive of income de-recognition) of Rs.177 Crores in 2015-16, following the regulator''s directive to shift from a 180 day to a 150 day norm for NPA recognition. The RBI in 2014 tightened the NPA recognition norms for NBFCs'' to bring them on par with banks. We followed a 180 day norm (loans, where borrowers have defaulted in their payments for 180 days or more, were classified as NPAs). Now we will have to comply with the 90 day norm by March 2018.This will impact our earnings in two ways. One will be the reversal in interest income on migrating to the 90 day norm and, two, the increase in provisioning on account of incremental NPAs. In FY 2015-16, we moved to the 150 day norm, which has translated into escalating NPAs. From 3.01% in FY 2014-15, gross NPAs'' have touched 5.15% in FY 2015-16 on a 150 day cut off (3.6% under 180 days). Earnings have declined by 5% in FY 2015-16 vis--vis the previous year. Enterprise finance remains our key product; and it comprises 54% of our disbursements in FY 2015-16. We have built competencies to assess demand gaps in this domain; and are well positioned to cater to the demand with our focus on Tier II and Tier III towns. Rising middle class aspirations, growing per capita income and easy financing options are driving our two wheeler, four wheeler and Gold loan products. We are also taking advantage of emerging opportunities to grow our retail finance presence. Our housing finance subsidiary, with focus on the affordable home loan segment is growing at a steady pace. The Government''s Real Estate (Regulation and Development) Act, 2016 is a major step to protect the interests of home buyers; and will bolster the confidence of home buyers and market players in the home loans segment. Our loan book grew by 73% in FY 2015-16, owing to growing scale and scope. We are consolidating our leadership positions in enterprise finance and two wheeler finance. We are also strengthening our position and operations in the western and southern parts of India. At the same time, we are foraying into new markets across the eastern and northern parts of India. We are entering new markets after evaluation of local market dynamics, ''on ground'' credit assessment and establishment of strong recovery mechanism. We have leveraged our technology capabilities to facilitate faster and convenient processes, create best-in-class technology platforms and reduce transaction costs. We have capitalised on the emerging transformational trends of mobility, digitisation and rapid growth of social media, to create value for our customers. In line with the constantly changing digital landscape, we are enhancing our robust technology platform to ensure customer satisfaction; and move in step with Digital India. We have a diverse workforce comprising professionals from different geographies with varying educational and socio-economic profiles. We train our people for relevant skills and instill a culture of high performance, along with transparency and ethical business practices. At Shriram City, social responsibility forms an important part of our business philosophy. During the year, we conducted various community development initiatives, in line with our credo of holistic growth. We will continue to deliver on our stakeholder expectations, while working passionately to enable enterprising India. Warm Regards, Duruvasan Ramachandra