Non-banking financial company Shriram Transport Finance on Thursday reported a 43.87 per cent jump in its standalone profit after tax at Rs 1,086.13 crore in the quarter ended March 2022, on the back of improvement in the net interest margin and asset quality.
The company had reported a standalone profit after tax of Rs 754.93 crore in the same period of FY21.
''The growth in profit was due to better NIM (Net Interest Margin) driven by lower cost of funds, and also as asset quality improved,'' said Umesh Revankar, Vice Chairman and Managing Director of Shriram Transport Finance.
The company in a release said the significant increase in economic activities after easing of COVID-19-related restrictions resulted in improvement in its business operations.
NIM jumped to 6.96 per cent during the quarter under review from 6.80 per cent in the fourth quarter of FY21.
Cost of borrowing reduced to 8.54 per cent in the reporting quarter from 9.14 per cent in the same period of the preceding fiscal.
Revankar expects cost of borrowing to improve further during the first two quarters of FY23.
The company's gross stage 3 (non-performing assets) stood at 7.07 per cent as compared to 7.06 per cent in Q4 FY21 and 8.40 per cent in Q3 FY22. Net stage 3 was at 3.67 per cent as against 4.22 per cent.
Its collections for the fourth quarter stood at 104.28 per cent.
The total asset under management grew by 8.36 per cent to Rs 127,040.86 crore as on March 31, 2022 as against Rs 117,242.83 crore a year ago.
During the quarter, the company wrote off Rs 799.92 crore by utilising the Expected Credit Loss (ECL) provision created as management overlay on account of COVID-19.
The ECL provision of Rs 2,052.58 crore is retained by the company as on March 31, 2022 towards management overlay on account of COVID-19.
In December last year, the board of directors of the company had approved a composite scheme of arrangement and amalgamation, allowing amalgamation of Shriram Capital Ltd (after de-merger of a few undertakings from Shriram Capital Ltd) and Shriram City Union Finance Ltd with the company.
The company has received in-principle approval from BSE and NSE for the proposed merger, a release said.
On Thursday, Shriram Transport Finance scrip closed at Rs 1,143.6, up 0.23 per cent, on the BSE.
(With inputs from PTI)
