Shriram Transport Fin jumps 4% as investors cheer 11% rise in Q3 net interest income

NEW DELHI – Shares of gained 4 per cent in early trade Tuesday even as the non-bank financing company reported a decline in standalone profit as investors took heart from a hefty rise in net interest income.

Shriram Transport Finance reported a 6.47 per cent decline in standalone profit after tax at Rs 680.62 crore in the quarter ended December 2021, while net interest income increased by 11.16 per cent. The company had reported a profit after tax of Rs 727.72 crore in the same period of the previous year.

The company’s scrip rose to a high of Rs 1,202 against the previous close of Rs 1,154.60 on the BSE.

According to a PTI report, STFC Vice Chairman and Managing Director Umesh Revankar attributed the fall in profit to the revised prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to advances issued in November last year, which led to higher non-performing assets.

Net interest income grew by 11.16 per cent to Rs 2,387.97 crore in the latest quarter under review against Rs 2,148.22 crore in the year-ago period.

Gross stage 3 assets stood at 8.40 per cent as against 7.11 per cent. Revankar said had it not been for the RBI norms, gross stage 3 assets would have been 80 basis points lower at 7.62 per cent.

Net stage 3 assets were at 4.36 per cent against 4.31 per cent in the year-ago period, PTI reported.

Revankar was quoted as saying by PTI that the restructured book is performing well and that there was no stress due to the third wave of Covid-19. The liquidity coverage ratio was 164.99 per cent as of December 31, 2021.

The company’s assets under management grew by 8.41 per cent to Rs 1,24,601.77 crore compared to Rs 1,14,932.06 crore over the same period a year ago.