Shriram Transport Finance, one of the country's leading NBFC, announced its quarter first results on Tuesday. The net interest income (NII) of the company rose 14.12 per cent to Rs 962.88 crore from Rs 843.75 crore in the same quarter last year.
On profit front, the company registered net profit of Rs 366.27 crore, a rise of 7.07 per cent from 342.08 crore in Q1 FY13. Talking to The Pioneer, Parag Sharma, Chief Financial Officer of the company, kept his views on the company performance but along side also expressed concerns which the company might have to see till September quarter. He said, "Going forward, the business environment is slightly challenging and there might be some contraction on the profit front till the September quarter. But after that, with the festive demand coming, the performance will improve."
Shriram Transport had recently announced a non convertible debenture (NCD) through which they planned to raise Rs 375 crores with an option to retain over- subscription up to Rs 375 crore for issuance of additional NCDs. Parag Sharma, speaking on the status of the fund raising said, "Retail response has been very good and we have managed to raise more than Rs 705 crore. After such a strong response we have announced an early closure of the NCD on July 24 itself." Throwing light on the current debt situation and the asset quality of the company, he added, "We have a total debt of Rs 39,000 crore and it mainly comprises of institutional debt. Debt is well managed and do not feel any major pressure due to it." As per management, the company has always been able to maintain a steady asset quality and do not feel any major rise in the gross non performing assets (GNPAs). "We have maintained our GNPAs around 3 per cent and going forward we do not see any major rise in them," Parag further added.
There has been a decline in commercial vehicle demand but Parag feels it won't have an immediate impact on the financials of the company. "We are mostly into second hand vehicle buying and hence the drop in new vehicle sales won't have any major impact. There can be a little fall in volumes but we do not see any impact on profitability," he added. The company two years back had started an initiative to expand business in rural India. After two years, the efforts have paid off, as now the company has over 400 rural centers along with 24 auto malls for second hand CV sale. Commenting of further plans, he added, "We plan to strengthen the company's position and aim to open establish in total 40 auto malls by the end of this year." Going forward there is pressure in the financing market but Shriram Transport Finance still believes they can overcome and perform. Commenting on growth projections for FY14, Parag Sharma said, "We hope to grow by 12 to 14 per cent by the end of FY14."