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Shriram Transport Finance gains 6% after Q4 results

Shriram Transport Finance gains 6% after Q4 results

Shriram Transport Finance gains 6% after Q4 results
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By Ankit Gohel  Jun 11, 2020 11:58:47 AM IST (Updated)

Shares of Shriram Transport Finance rose over 6 percent on Thursday even after the company reported its March quarter earnings. The stock touched intraday high of Rs 675.75 apiece after gaining 6.34 percent on the BSE.

Shares of Shriram Transport Finance rose over 6 percent on Thursday, a day after the non-banking financial company (NBFC) reported its March quarter earnings. The stock touched an intraday high of Rs 675.75 apiece after gaining 6.34 percent on the BSE. At 10:50 am, the stock was trading 2.68 percent higher at Rs 652.50 per share.

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The company’s consolidated net profit in Q4FY20 declined 70 percent to Rs 223.38 crore as against Rs 746.04 crore during the same period last year.
Total income during the quarter rose by 7.5 percent to Rs 4,173.04 crore versus Rs 3,883.38 crore, YoY.
The company has made additional expected credit loss provision of Rs 909.64 crore on account of COVID-19 impact in the financial statement, the company said in a regulatory filing.
The company’s 70 percent of the loan book was under moratorium as of May.
Disbursals during the quarter under review at Rs 10,869 crore were the lowest in five-quarter. Disbursals declined 9.1 percent YoY and 4.7 percent QoQ. Collections have improved in May to 52 percent as against 23 percent in April.
However, assets under management (AUM) grew 5 percent YoY to Rs 1,09,749 crore
In 4Q, net interest income (NII) growth lagged at 1 percent YoY due to pressure on net interest margin (NIM) reflecting rise in share of liquid-assets with negative spreads.
Gross non-performing assets (GNPA) of the company was lowest in last 5 quarters at 8.37 percent versus 8.78 percent, QoQ.
As of March 2020, the company’s gross stage 3 loans saw a slight decline to 8.5 percent of loans.
Jefferies believes that the company would need to beef-up its liquidity position either through better collections or additional borrowings.
The NBFC declared that the interim dividend of Rs 5 per equity share paid in November 2019 shall be the final dividend for 2019-20 in order to conserve cash resources to face the challenges and the contingencies created by COVID-19.
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