On a consolidated basis, Shriram Transport Finance Company's net profit dropped 17.2% to Rs 727.72 crore on 5.2% rise in total income to Rs 4,443.12 crore in Q3 December 2020 over Q3 December 2019.
Profit before tax (PBT) declined 16.6% to Rs 989 crore in Q3 December 2020 as against Rs 1,186.32 crore in Q3 December 2019. Current tax expense for the quarter fell 10.3% to Rs 263.70 crore as against Rs 293.97 crore in Q3 December 2019. The Q3 result was declared post trading hours yesterday, 28 January 2021.
On a standalone basis, net profit dropped 17.2% to Rs 727.72 crore on 5.2% rise in total income to Rs 4,443.12 crore in Q3 December 2020 over Q3 December 2019.
The Net Interest Income (NII) for Q3 FY21 was at Rs 2,148.22 crore as against Rs 2,113.75 crore in the same period of the previous year. Total Assets under Management (AUM) as on 31 December 2020 was at Rs 1,14,932.06 crore as compared to Rs 1,08,931.38 crore as on 31 December 2019.
In view of the disruptions being caused by COVID-19 pandemic and the prolonged lockdown significantly impacting the country's economy the company has considered an additional Expected Credit Loss (ECL) provision on loans of Rs 224.82 crore and Rs 1,597.62 crore on account of the pandemic during the quarter and nine-month period ended 31 December 2020 respectively. As at 31 December 2020, additional ECL provision on loan assets as management overlay on account of COVID-19 stood at Rs 2,507.26 crore.
The additional ECL provision on account of the pandemic is based on the company's historical experience, collection efficiencies post completion of moratorium period, scheme by Government of India (GoI), internal assessment and other emerging forward-looking factors on account of the pandemic. However, the actual impact may vary due to prevailing uncertainty caused by the pandemic. Shriram Transport Finance Co.'s management is continuously monitoring the situation and the economic factors affecting the operations of the company.
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The Supreme Court (SC), in a public interest litigation (Gajendra Sharma vs. Union of India & Anr). vide an interim order on 3 September 2020, had directed that accounts which were not declared NPA till 31 August 2020 shall not be declared as NPA till further orders. Gross NPA and Net NPA as of 31 December, 2020 stood at 5.33% and 3.22 % respectively as against 8.71% and 6.09% as of 31 December 2019. However, such accounts have been classified as Stage III and provisioned accordingly. Had the company classified these borrower accounts as NPA after 31 August 2020, the company's gross NPA and net NPA ratio would have been 7.11% and 4.31% respectively.
Shares of Shriram Transport Finance Company soared 15.53% to Rs 1,283.90. Shriram Transport Finance Company, the flagship company of the Shriram group, has significant presence in consumer finance, life insurance, general insurance, stock broking and distribution businesses.
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