Shriram Transport Finance Company fell 3.16% to Rs 676.65 after consolidated net profit declined 10.52% to Rs 684.56 crore on 4.7% rise in total income to Rs 4,351.26 crore in Q2 September 2020 over Q2 September 2019.
Profit before tax (PBT) fell 0.7% to Rs 920.42 crore in Q2 September 2020 as against Rs 926.87 crore in Q2 September 2019. Current tax expense for the quarter jumped 84.8% to Rs 226.77 crore as against Rs 122.68 crore in Q2 September 2019. The Q2 result was declared after market hours yesterday, 29 October 2020.
The Net Interest Income (NII) for the second quarter ended 30 September 2020 was at Rs 2,021.86 crore as against Rs 2,056.11 crore in the same period of the previous year, recording a 1.67% Y-o-Y (year-on-year) fall. The COVID-19 pandemic has significantly affected various sectors of Indian economy. The prolonged lockdown imposed by the government due to COVID- 19 pandemic has affected the company's business operations. The firm has considered an additional Expected Credit Loss (ECL) provision on loans of Rs 416.65 crore and Rs 1,372.80 crore on account of COVID-19 during the quarter and half year ended 30 September 2020 respectively.
In spite of the moratorium, the company has been able to collect from 84%, 23%, 52%, 71%, 73%, 78% borrowers in the month of March, April, May, June, July and August 2020 respectively. Post moratorium, the collections for the month of September 2020 was 95% of the demand. The Company expects One Time Restructuring to be opted by around 3 % of its portfolio whose business is still being impacted by COVID-19. The liquidity buffer and SLR investments was Rs 10891 crore and Rs 1809 crore respectively.
As of 30 September 2020, additional ECL provision on loan assets as management overlay on account of COVID-19 stood at Rs 2,282.44 crore. The additional ECL provision on account of COVID-19 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, the firm added.
The Supreme Court (SC) has 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 30 September 2020 stood at 6.42% and 3.64% respectively as against 8.80% and 6.15% as of 30 September 2019. However, such accounts have been classified as stage III and provisioned accordingly. If the Shriram Transport Finance had classified borrower accounts as NPA after 31 August 2020, the company's Gross NPA and Net NPA ratio would have been 7.26% and 4.51% respectively.
Total assets under management (AUM) as on 30 September 2020 stood at Rs 1,13,345.93 crore as compared to Rs 1,08,120.24 crore as on 30 September, 2019, recording a 4.83% Y-o-Y growth. The board declared an interim dividend of Rs 6 per share. The record date is fixed on 10 November 2020.
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.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
