Shriram City Q2 net profit up 23% at Rs 383 cr on increased loan demand

Shriram City Union Finance on Friday reported a 23 per cent rise in its consolidated net profit at Rs 383 crore for the quarter ended September 2022 on the back of increased demand

Shriram City Union Finance (Shriram City) on Friday reported a 23 per cent rise in its consolidated net profit at Rs 383 crore for the quarter ended September 2022 on the back of increased demand as economic activity improved. The company's net profit in the quarter ended September 2021 stood at Rs 301 crore.

The income from operations rose by 26.2 per cent to Rs 2,155 crore in July-September period of 2022-23 as against Rs 1,708 crore in the same quarter of 2021-22, the company said in a release.

Net interest income -- interest earned minus expended -- grew by nearly 30 per cent to Rs 1,327 crore against Rs 1,022 crore.

The non-banking finance company mainly caters to small enterprises. It is among the largest two-wheeler financiers in the country.

On a consolidated basis, disbursements rose to the highest ever Rs 9,069 crore, up 28.5 per cent year-on-year, backed by the improving economic activity and strong revival in small enterprise finance, robust demand for gold loans, improving two-wheeler demand and affordable housing, it said.

The Assets Under Management (AUM) rose by 23 per cent from a year ago to Rs 42,663 crore.

The consolidated results include Shriram City and Shriram Housing Finance Limited. On the asset quality front, there was improvement with gross NPAs declining 18 bps from the June quarter to 5.93 per cent in Q2 FY23 (6.11 per cent in Q1 FY23).

"Economic activity has picked up in 1H FY23 driving demand for credit from rural and semi-urban markets and we expect this momentum to sustain.

"The healthy operational performance of Shriram City has been driven by robust customer addition, new loans by small enterprises, all products added in Shriram Transport branches and aided by the digital ecosystem," Y S Chakravarti, MD & CEO, Shriram City said.

The merger of Shriram Transport Finance Company (STFC), Shriram Capital and Shriram City Union Finance was approved by the company board in December last year.

He said the integration for the merger is well underway and the company is working as a single unit already.