Commercial vehicles financier Shriram Transport Finance, part of the Shriram Group, has reported a 20 per cent growth in net profits, to Rs 347 crore in the first quarter of 2011-12 compared with Rs 288 crore for the same period last year. Income from operations increased by 13 per cent to Rs 1,392 crore as against Rs 1,233 crore for the corresponding quarter last year.
Mr R.Sridhar, Managing Director, Shriram Transport Finance, told Business Line that the company was likely to stick to its projected growth rate target of 15 per cent for the second quarter. Although the Reserve Bank of India had hiked key policy rates by 50 basis points, the company would decide on revising the growth rate only after evaluating the progress of the monsoon, he said It is a balancing act between maintaining net interest margins and growth, he said. “We will have to compromise on NIMs to maintain growth.”
The commercial vehicle segment was witnessing a slowdown, especially in the sale of heavy and medium commercial vehicles, and the RBI's rate increase would further curtail demand, Mr Sridhar said. With interest rates peaking, fleet owners were wary about buying vehicles as they usually financed their purchases at fixed rates of interest, he said.
Earnings per share rose by 19.9 per cent to Rs 15.36 from Rs 12.80 the same period last year. Shriram Transport Finance's total assets under management stood at Rs 36,997 crore as on June 30, 2011 compared with Rs 36,182 crore as on March 31, 2011. The company's shares closed 3.41 per cent down, at Rs 678 on the Bombay Stock Exchange Tuesday.