Post-merger, Shriram Finance consolidated net jumps multifold to Rs 1,777 cr

NewsDrum Desk
31 Jan 2023

Mumbai, Jan 31 (PTI) Shriram Finance, the newly-formed combined financial services entity of the Chennai-based Shriram Group, on Tuesday reported a consolidated net profit of Rs 1,777 crore for the December quarter of FY2022-23.

The numbers are not comparable as the merger of Shriram Transport Finance Company, Shriram City Union Finance and Shriram Capital into Shriram Finance took place only early last December.

The main operating company pre-merger, Shriram Transport Finance, had booked a net income of Rs 680.62 crore in the September quarter. The company said consolidated net interest income for the quarter stood at Rs 4,428 crore as against Rs 2,388 crore in the September quarter.

The earnings per share nearly doubled to Rs 47.46 from Rs 25.26 pre-merger, the company said.

Shriram Finance executive vice-chairman Umesh Revankar told PTI that the company expects to close the current fiscal year with a 15 per cent growth in advances, which for the reporting quarter grew a tad lower at 13.2 per cent.

Total assets under management grew to Rs 177,498.17 crore from Rs 1,24,601.77 crore in December 2021 and Rs 1,69,358.21 crore in September 2022.

During the quarter net advances grew by Rs 29,000 crore from Rs 26,000 crore in the second quarter.

The asset base, Revankar said, continues to be led by commercial vehicle finance constituting 50 per cent of the book and loan growth, followed by passenger vehicle finance at 18 per cent of the book.

The share of two-wheeler finance in the total loan book is 5.6 per cent, he said, adding and that of SME book stood at 11 per cent. All the key verticals continue to maintain the same level of revenue and AUM shares pre-merger, he added.

"We are planning to increase the SME book over the next three years. Currently, our SME books are concentrated mostly in the South and West and we want to take it the North now, which will happen over the next three years," Revankar said.

The company said the key profitability gauge net interest margin inched up to 8.52 per cent in the reporting quarter from 8.26 per cent in the September quarter.

Revankar also said the merger has seen asset quality improving by a notch with gross non-performing assets (NPAs) printing in at 6.29 per cent or Rs 11,058 crore down from 6.31 per cent in Q2.

Similarly, net NPA too improved to 3.20 per cent or Rs 5,390 crore from 3.32 per cent in the previous quarter. This helped the company improve its credit loss too to 2 per cent from 2.26 per cent in the previous reporting quarter.

Reflecting the rising interest rate regime, the company saw its cost of funds rising to 8.75 per cent from 8.43 per cent.

But Revankar does not see any further troubles on this front given the inflation has been continuously coming down since November.

Shriram Finance is the flagship company of the Shriram Group which has a significant presence in consumer finance, life and general insurance, housing finance, stock broking and distribution businesses. Shriram Finance is the largest retail asset financing non-banking finance company. PTI BEN MR

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