IndoStar Capital Finance reported Q2 net up by 31% at Rs 52 crore

IndoStar Capital Finance on Tuesday reported a 31 per cent rise in net profit at Rs 51.6 crore for the quarter ended September 2022.

The non-banking finance company had posted a net profit of Rs 39.5 crore in the year-ago period. The profit, however, was down by 15 per cent from Rs 60.9 crore in the preceding quarter ended June 2022.

There was a marginal rise of 3 per cent in net revenues at Rs 149 crore during the July-September quarter of 2022-23, as against Rs 144.8 crore in the same period of 2021-22, IndoStar said in a release.

Sequentially, the net revenues fell by 11 per cent from Rs 167 crore in the June 2022 quarter.

Collections of Rs 870 crore during the quarter resulted in gross collection efficiency of 135 per cent.

AUM (assets under management) stood at Rs 7,908 crore and capital adequacy was at 34.1 per cent, 510 bps higher than Q1 FY23.

The company's debt/equity ratio at 1.8 times continues to be one of the lowest in the industry, it said.

"The company has raised incremental funding of around Rs 2,527 crore in H1FY23 and continues to enjoy a healthy liquidity position, with cash and cash equivalents at 30 September 2022 at Rs 834 crore," it added.

All of this was reflected in IndoStar's Asset Liability Management (ALM) profile, which has seen significant improvement from the previous quarter.

"In their limited review for the quarter ended 30 September 2022, the statutory auditors Deloitte Haskins and Sells (Deloitte) have removed their comment on going concern risk," it said further.

IndoStar said it has reduced the size of its stressed assets book.

The gross stage 3 assets and net stage 3 assets at 30 September 2022 were 7.1 per cent and 2.9 per cent, respectively. "The company continues to make focused efforts to further reduce its stress book."

As part of its retailisation strategy, retail loans have gone up from 78 per cent in FY21 to 84 per cent in Q2 FY23, IndoStar said.