Satin Creditcare Q2 net drops 70% to Rs 16 cr hit by higher provision

Satin Creditcare Network on Friday reported a 70 per cent drop in consolidated profit after tax at Rs 16 crore for the September quarter, hit by higher provisioning and lower disbursements amid the lockdown.

The microfinance institution (MFI) had reported a profit after tax of Rs 54 crore on a consolidated basis in the year-ago period.

"Profit in the quarter was impacted by higher provisioning, lower collection efficiency and also as disbursements are yet to pick up," its Chairman and Managing Director H P Singh said.

The lender made a provision of Rs 53 crore related to COVID-19 and other external factors. Collection efficiency in September stood at 94 per cent.

During the quarter, microfinance disbursements stood at Rs 632 crore as compared to Rs 1,819 crore in the same quarter of the previous fiscal.

Disbursement growth got impacted on account of the COVID-19 lockdown.

However, on a quarter-on-quarter basis, the lender saw improvement in disbursements and collection.

"Our disbursements for the quarter stood at Rs 632 crore as against Rs 54 crore in Q1 FY21 which is a big positive. Also, our collection efficiency improved from 62 per cent in June to 94 per cent at the end of September 2020. We expect this momentum to continue in the coming quarters," Singh said.

Gross non-performing assets (GNPA) stood at 2.9 per cent and net NPA was at (-) 1 per cent.

Its capital to risk weighted assets ratio (CRAR) stood at 32.33 per cent.

The lender maintains a healthy balance sheet liquidity with Rs 1,962 crore of surplus funds as of end September. It has undrawn sanctions worth Rs 1,063 crore as on September 30, 2020.

The company said its reliance on NBFC funding has also reduced to 5 per cent from 8 per cent last year, thus decreasing its dependence on higher cost funding. Close to 62 per cent of its borrowing is done through banks.

Its scrip closed at Rs 62.15 apiece, up 4.98 per cent on BSE on Friday.