Shriram Transport Finance Company (STFC) posted a 468% year-on-year (y-o-y) jump in its net profit to Rs 965.3 crore on account of a drop in provisions in the three months ended June 30. The non-banking finance company saw a 44% y-o-y decline in its provisions to Rs 805 crore in Q1FY23.
The company’s net interest income rose by 25% y-o-y to Rs 2,642 crore in Q1FY23. Net interest margin (NIM) improved by 53 basis points (bps) y-o-y to 6.91% as on June 30 but declined slightly by 5 bps on a sequential basis.
Assets under management (AUM) grew by 9.6% y-o-y to Rs1.31 trillion led by improvement in the used vehicle loans business. The AUM of the used vehicle loans improved 13% y-o-y to Rs1.23 trillion while that of new vehicles, business and working capital loans fell in the range of 20-31% y-o-y.
The gross stage-3 assets were at 7% in Q1FY23 as against 8.18% in the previous year while net stage-3 assets stood at 3.52% in Q1FY23 as against 4.74% in the previous year. Provisions for expected credit loss from gross stage-3 asset increased 9.7% y-o-y to Rs 4,678 crore in Q1FY23. The collections for Q1FY22 stood at 101.45% as against 91.04% in Q1FY22 and 104.28% in Q4FY22.
The company had implemented resolution plans to relieve pandemic related stress to 39,410 accounts amounting to Rs 1,153 crore. The company has settled 8,583 accounts with advance amount of Rs 175 crore and outstanding of remaining accounts was Rs 7,63 crore, of which 1.50% was in gross stage-3 bucket.
Liquidity coverage ratio was 191.99% as of June 30. The liquidity buffer and SLR investments was Rs 17,709 crore and Rs 3,154 crore, respectively. The liquidity buffer and SLR investments was Rs 18,020 crore and Rs 3,248 crore, respectively.