Shriram Transport Finance's profit flat at Rs 341 cr

On a consolidated basis STFC reported 7% rise in net profit at Rs 366 cr

Shriram Transport Finance Company (STFC) reported a flat growth in net profit at Rs 341 crore rising just 6 per cent on lower growth in the interest income and shrinking margins in the first quarter. The company net interest income rose 12.5 per cent to Rs 902 crore for the quarter. The truck financier’s net interest margin (NIM) came down to 7.01 per cent from 7.23 per cent sequentially.

On a consolidated basis STFC reported a 7 per cent rise in net profit at Rs 366 crore. “There is some drop in net interest margins and an increase in cost of operation” said Umesh Revankar, managing director. “We have started financing newer vehicles where the rate of interest is a little lower,” said Revankar while explaining the drop in margin. The total income of the company was at Rs 2,003 crore, a rise of 28 per cent. However, 24 per cent rise in the provisions dented the effect of the healthy growth in total income. Provisions were at Rs 259 crore.

STFC’s gross non-performing assets(NPA) increased to 3.09 per cent from 3 per cent a year ago while net NPA increased to 0.68 per cent from 0.62 per cent from the corresponding quarter last year. “Due to a tough business environment and liquidity crunch for the customers, NPAs have gone up” Revankar said. The company’s capital adequacy ratio (CAR) stood at 20.25 per cent. Shriram Transport’s holding company, Shriram Capital, has applied for a banking licence.