Moneycontrol PRO
Live: Live: Which RJ stock is worth betting on

Shriram Transport Finance Q1 net down 47% to Rs 170 crore on higher bad loan provisioning

Shriram Transport Finance stock closed 1.38 percent up at Rs 1,391.45 apiece on BSE.

July 31, 2021 / 12:16 PM IST
Shriram Transport Finance Company | STFC said its board of directors also approved periodical resource mobilisation by issuance of debt securities. (Representative image)

Shriram Transport Finance Company | STFC said its board of directors also approved periodical resource mobilisation by issuance of debt securities. (Representative image)

Non-banking finance company Shriram Transport Finance on July 30 reported a 46.90 percent drop in standalone net profit to Rs 169.94 crore for the quarter ended June due to higher provisioning for bad loans.

The lender had reported a net profit of Rs 320.06 crore in the year-ago quarter. Its Managing Director and CEO Umesh Revankar said the Q1 FY22 numbers cannot be compared with the same quarter of the previous year as there was a moratorium.

"Due to the second wave of COVID, gross Stage 3 assets (NPAs) increased. So we felt the need to make additional provisioning. We also feel that passenger vehicle segment is still undergoing challenges and hence, we provided for it,” Revankar said. During the period, it made COVID provisioning of Rs 261.02 crore.

Net interest income (NII) for the quarter rose 14.38 percent to Rs 2,107.45 crore from Rs 1,842.54 crore in the same period of the previous year. Gross Stage 3 assets stood at 8.18 percent from 7.98 percent. Net Stage 3 assets were at 4.74 percent as against 5.06 percent in the year-ago period.

The collections for April, May and June stood at 92 percent, 87 percent and 94 percent. "We feel that July has been good so far and we expect momentum to be much better in August and September. We should be able to reduce our Stage 3 and Stage 3 levels and will show better results going forward," Revankar said.

Close

"We feel that July has been good so far and we expect momentum to be much better in August and September. We should be able to reduce our Stage 3 and Stage 3 levels and will show better results going forward," Revankar said.

Under the RBI’s Resolution Framework 2.0, the lender has invoked resolution plans for eligible borrowers worth Rs 1,434.14 crore. The lender restructured Rs 300 crore of loans in the quarter and expects a similar amount of restructuring in the second quarter as well.

Total assets under management (AUM) grew 6.75 percent to Rs 119,301.37 crore as compared to Rs 111,756.37 crore. The Q1 numbers include the results of STFC, the holding company, and associate firm Shriram Automall India Ltd.

STFC said its board of directors also approved periodical resource mobilisation by issuance of debt securities. The company plans to issue such instruments on a private placement basis in tranches from August 1 to October 31, 2021, it added.

The flagship company of the Shriram Group, STFC mainly provides finance for commercial vehicle industry. Shriram Transport Finance stock closed 1.38 percent up at Rs 1,391.45 apiece on BSE.
PTI
first published: Jul 31, 2021 12:16 pm
Sections
ISO 27001 - BSI Assurance Mark