Shriram Transport Finance Corporation's first quarter standalone net profit may fall 3.2 percent year-on-year to Rs 297 crore while net interest income is seen rising 5.6 percent to Rs 1,019 crore, according to average of estimates of analysts polled by CNBC-TV18.
All eyes will be on consolidated earnings as it included the equipment finance subsidiary that had been the key disappointment in March quarter with consolidated profit falling over 70 percent and equipment finance subsidiary recording over Rs 230 crore loss with gross non-performing loans jumping to 15.7 percent (against 2.9 percent Q-o-Q).
However, construction equipment business is less than 10 percent of consolidated numbers of Shriram.
The positive factor during the quarter was credit rating upgraded by CRISIL to AA+ from AA. This rating upgrade is likely to lead to cost of fund improvement of around 25 basis points over the next 12-24 months.
Analysts (in their estimates) priced in higher provisions (which increased by 11.5 percent Y-o-Y for standalone business. Gross non-perfoming loans (NPLs) for commercial vehicle business could be impacted by fears on monsoon.
Recovery in equipment finance subsidiary will be closely watched.
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