Shriram Transport Finance Company on Friday reported a 55% year-on-year fall in its net profit for the March quarter at Rs 143.92 crore as near-doubling of provisions weighed on the company’s bottomline.
The company’s total income for the quarter came in at Rs 2,917.28 crore, up over 26% year-on-year. Its net interest income, which is the difference between interest earned and interest expended, stood at Rs 1,443.78 crore, 31.5% higher than in the same quarter last year. However, these numbers are not strictly comparable on a year-on-year basis since the company’s merger with Shriram Equipment Finance Company got concluded during the fiscal ended March 31.
In a post-earnings conference call, managing director Umesh Revankar said that the company had been witnessing a rise in demand for commercial vehicles throughout the previous financial year. Even in the formerly-troubled light commercial vehicles segment, which started recovering sometime around October last year, the company reported a year-on-year growth of 11%.
Revankar also said that the prediction of a normal monsoon by the Indian Meteorological Department and private weather information provider Skymet augured well for the company going ahead, especially after the conclusion of the monsoon around October this year. Also, estimates peg this year’s Rabi harvest to be slightly above last year’s, despite irregular weather conditions in some parts of the country and this will likely result in increased demand from the agricultural sector.
In the quarter under review, Shriram Transport Finance saw a surge in provisions and write-offs, which more than doubled year-on-year to Rs 856.73 crore.
This was mainly on account of a change in norms for recognizing non-performing assets and providing for standard ones, the company said in a post-results statement.