Shriram Transport's Q1 net profit surges four-fold to Rs 965 crore

Shriram Transport Finance Company (STFC), the flagship company of Shriram Group, has posted over four-fold rise in net profit to Rs 965.27 crore during the first quarter of 2022-23, against Rs 169.94 crore in Q1FY22.

The company’s total income for the quarter under review saw a 10.7 per cent increase to Rs 5,149.26 crore, up from Rs 4,651.5 crore a year ago. The operating profit for the April-June quarter of the current financial year was up 26.15 per cent to Rs 2,112.04 crore, against Rs 1,674.29 crore in Q1FY22.

The rise in net profit during the first quarter was largely on account of heavy provisioning last year because of the second Covid wave. Loan losses and provisions declined 44 per cent YoY during the current year. 

The company’s net interest income for the first quarter ended on June 30, 2022, increased 25.35 per cent to Rs 2,641.74 crore, against Rs 2,107.45 crore during April-June 2021.

STFC’s total assets under management by the end of the quarter stood at Rs 130,688.86 crore, against Rs 119,301.37 crore a year ago. 

Collections for Q1FY23, Q4FY22, and Q1FY22 were 101.45 per cent, 104.28 per cent, and 91.04 per cent of demand, respectively. The liquidity coverage ratio during the period under review was 191.99 per cent.

During the June quarter, STFC’s gross stage three assets declined 6.18 per cent to Rs 9,061.7 crore, while its net stage three assets also came down by 18.72 per cent to Rs 4,383.97 crore. The increase in economic activities after the easing of lockdown by state governments due to Covid-19 resulted in an improvement in business operations of the company, it said in an investor presentation.

During the quarter, the company wrote off loans outstanding amounting to Rs 2,16.18 crore by utilising the ECL (expected credit loss) provision created as management overlay on account of Covid -19.