Shriram Transport Finance zooms 13% on strong Q3FY20 results

Shares of Shriram Transport Finance Enterprise surged thirteen for every cent to Rs 1,113 on the BSE on Tuesday on steady belongings high quality with gross non-executing belongings (GNPL) ratio improving upon 10bps in December quarter on sequential foundation, driven by lower net slippages.

The firm’s net revenue grew 38.1 for every cent 12 months on 12 months (y-o-y) to Rs 882 crore in the quarter finished December 2019 (Q3FY20). Earnings before tax (PBT) rose by twenty.six for every cent at Rs 1,186 crore in the quarter on increase in other income and tumble in financial loan losses and provisions.

The net interest income (NII) in reporting quarter rose by just 1.36 for every cent at Rs two,055 crore as towards Rs. two,028 crore in Q3FY19. The net interest margin on asset below management (AUM) declined by 30 foundation points to seven.14 for every cent in Q3FY20 from seven.forty four percent in Q3FY18. The other income rose a lot more than a few-fold to Rs 64.4 crore in Q3FY20 from Rs 18.4 crore in similar quarter of final fiscal.

Full AUM rose by 4.ninety three for every cent to Rs 1,08,931 crore at the stop of December 2019 as towards Rs 1,03,817 crore in the similar quarter earlier 12 months. The AUM expansion impacted by a 14 for every cent YoY drop in new professional vehicles funding.

“The current liquidity crisis has strike non-banking finance organizations hard and Shriram Transport Finance is no exception. More than the previous 12 months, the firm has diversified into newer borrowing sources like retail NCDs and ECBs. Though AUM expansion has been weak, the firm has performed a excellent task of containing asset high quality – GNPL ratio has been steady at eight.5-eight.eight for every cent around the previous 6 quarters,” Motilal Oswal Securities mentioned in end result update.

“The sharp drop in credit prices is also optimistic. We hope credit prices to modestly drop from two.six for every cent in FY19 to two.5 for every cent in FY22 (earlier estimate of two.seven for every cent). We enhance our estimates by eight-nine for every cent to component in lower credit prices,” the brokerage organization mentioned with ‘buy’ rating on the stock.

At ten:twelve AM, the stock was buying and selling eight.64 for every cent higher at Rs 1,072.90 as when compared to 1.two for every cent attain in the benchmark S&P BSE Sensex. All around 32.seven lakh shares have altered arms on the counter on the NSE and BSE so much.