Shriram Finance, the largest financier of commercial vehicles, has reported an over 18 percent jump in net profit to Rs 1,980.6 crore in the June quarter as against Rs 1,675.44 crore recorded in the same period of the previous year.
The company from the Shriram group said in a statement Friday that its net interest income for the first quarter increased 20.63 percent to Rs 5,354.5 crore as against Rs 4,438.7 crore in the same period in the previous year and total income rose to Rs 9,609.7 crore from Rs 8,008 crore.
This was despite a fall in net interest margin that declined by 23 bps to 8.79 percent in the reporting quarter.
Gross NPAs declined by 64 bps to 5.39 percent and net NPAs declined by 25 bps to 2.71 percent. The company made an ECL (expected credit loss) provision of 6919.6 crore or 3.42 percent of gross assets.
Cost to income ratio stood at 27.45 percent compared to 28.85 percent.
Assets under management increased 20.82 percent to Rs 2,33,443.6 crore from Rs 1,93,214.7 crore and Rs 2,24,862 crore in March, 2024.
Following the improvement in asset quality or fall in bad loans, the provisions declined to Rs 1,188 crore from Rs 1,261 crore in Q4FY24 but rose from Rs 879 crore in Q1FY24. Deposits declined to 37 percent from 40 percent
During the quarter, Shriram Finance exited the housing finance business selling its subsidiary to Warburg Pincus for a consideration of Rs 4,630 crore of which the company will receive Rs 3,900 crore from the sale of its investment in the subsidiary, resulting in an increase in CRAR by around 80 bps.
The deal is expected to get regulatory approval by the end of the third quarter of the current financial year.