Shriram Transport Finance Company (STFC) standalone net profit soared to ₹965 crore in the first quarter against ₹170 crore in the year ago quarter on the back of healthy growth in net interest income and lower asset impairment provisions.
Net interest income (difference between interest earned and interest expended) was up 25 per cent year-on-year (yoy) at ₹2,642 crore (₹2,107 crore in the year ago quarter).
Provision towards asset impairment was 44 per cent down yoy at ₹805 crore (₹1,440 crore). STFC kept finance costs on a leash. Finance costs were at ₹2,458 crore (₹2,498 crore). The non-banking finance company received tax write back of ₹191 crore (₹ 240 crore).
Assets under management
Assets under management (AUM) was up 9.55 per cent yoy and stood at ₹1,30,689 crore as at June-end 2022.
A breakup of the AUM shows that used vehicle loan portfolio grew by 13 per cent yoy. New vehicle loan portfolio, business loans and working capital loans declines by 20 per cent, 31 per cent and 26 per cent, respectively.
Umesh Revankar, Vice Chairman and Managing Director, observed that new vehicle loans are expected to see a pick up and used vehicle loans momentum is seen sustaining as rural demand is strong.
Gross Stage 3 (impaired) assets declined to 7 per cent in Q1FY23 against 7.07 per cent in Q4FY22. Net Stage 3 assets too declined to 3.52 per cent against 3.67 per cent.
Net interest margin increased at 6.91 per cent against 6.38 per cent in the year ago quarter.