Alf Plans Spread In Personal Product Financing, Q3 Net Up 65%

Ashok Leyland Finance (ALF), in a bid to diversify its business risks, is exploring the possibility of extending their personal product portfolio in the next financial year. It is also likely to raise Tier-II capital to match its statutory capital adequacy ratio (CAR) requirements with projected growth.

According to company officials, the current capital base of Rs 253.47 crore (including reserve of Rs 181.92 crore) would only support a growth rate of 20 per cent. However, they refused to disclose further details.

The Chennai-based non-banking finance company (NBFC) has reported a 65 per cent increase in net profit during the third quarter ended December 2001 at Rs 26.07 crore as against Rs 15.76 crore in the corresponding period last year. Diluted earnings per share (EPS) during October-December 2001 was Rs 2.75 as against Rs 1.47 per share in the corresponding period last year.

Total income from operations during the same reported period was Rs 75.20 crore as against Rs 65.66 crore in October-December 2000, an increase of 15 per cent. Other income during the third quarter this year was Rs 2.52 crore as against Rs 2.35 crore in corresponding period last year.

Ashok Leyland Finance managing director S Nagarajan told mediapersons: "The improvement in profitability during the third quarter is mainly because of better product mix, efficient treasury management and control on transaction costs." Gross disbursement increased by 55 per cent during April-December 2001 to Rs 1,284 crore, up from Rs 828 crore in the corresponding period last year.

While disbursements under commercial vehicles, cars & utility vehicles and used vehicles increased during April-December 2001, their share in total disbursements had declined because of the rise in disbursements under personal products. Personal products disbursements, which were started in September 2000 (mainly two-wheeler), touched Rs 283 crore till December 2001.

Even for raising resources, Nagarajan explained that ALF has a well-balanced and diversified funding portfolio with each source of funding contributing less than 20 per cent. ALF during the nine months ended December 2001 raised Rs 1,461 crore (Rs 1,043 crore during the previous comparative period), out of which Rs 501 crore (Rs 347 crore) through term loans, Rs 364 crore (Rs 266 crore) through securitisation and Rs 215 crore (Rs 200 crore) through commercial paper.