Gross NPA at 0.58%, asset quality under pressure: GRUH Fin

GRUH Finance on Monday posted a net-profit at Rs 51.7 crore in the the second quarter of FY16 against Rs 43.1 crore year-on-year (YoY).Speaking to CNBC-TV18, Managing Director of GRUH Sudhin Choksey says the company’s gross non-performing assets (NPA) rose to 0.58 percent and its asset quality is under pressure. GRUH’s disbursement growth has slowed to 17 percent due to low demand and loan assets growth has remained under 25 percent, Choksey adds.Below is the transcript of Sudhin Choksey’s interview with CNBC-TV18\\'s Sonia Shenoy and Anuj Singhal.Sonia: Can you run us through what the key parameters are this quarter, what has the asset quality looked like?A: There has been a pressure on the asset quality. Our gross NPAs have gone up to the level of 0.58 percent. So, there has been a little threat on the recovery front. Other than that everything seems to be as we had planned and we have been working on. So, there are no other surprises in the numbers.Anuj: What happened with asset quality in last quarter and is that pressure going to stay or was this just a one or two quarter phenomenon?A: During the current financial year we have been seeing that there has been a general stress as far as the recovery is concerned. Retail borrows at low end of the market. May be they are facing a little difficulty. We have really see as to how Q3 and Q4 go. However current financial year I get the impression that it is slightly under pressure and stress is there.Sonia: When you stress, can you quantify that for us? From this 0.58 percent gross NPAs that you are currently at, how much do you think it could go to by the end of FY16?A: We are trying to retain it around 0.50 percent. Our gross NPAs were at a level of sub 0.3 percent and we are trying to work on a target of 0.5 percent. Those are the kind of numbers I would be looking at.Anuj: A word on credit growth, what kind of growth took place in the last quarter and what is the outlook for future?A: Disbursements have been growing at lower number. Disbursement growth has been to the tune of around 17 percent. The demand has not been very encouraging. Loan asset growth has remained at a 25 percent level. Sonia: What was the provisions number this quarter around?A: I think overall we have maintained around Rs 7-8 crore as provisions. That is good enough to take care of all our standard assets as well as NPA.