InvestorQ : What was the reason for the sharp fall in profits of Shriram Transport finance in the Jun-21 quarter?
Lavanya Subramanian made post

What was the reason for the sharp fall in profits of Shriram Transport finance in the Jun-21 quarter?

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Anamika Sodhani answered.
5 months ago
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Shriram Transport Finance reported 47% drop in standalone profits at Rs.170 crore for the Jun-21 quarter, on the back of higher provisioning for bad loans. This is sharply lower than the net profit figure of Rs.320 crore last year. As a result of the return of the pandemic, the performance was due to a rise in gross Stage 3 NPAs. Demand also remained tepid as the vehicles sales are yet to pick up in a meaningful.

For STFL, the gross Stage-3 assets stood at 8.18% in the Jun-21 quarter against lower levels I the previous year. Collections continue to remain at robust level of 90% plus. Under the RBI framework, STFL has invoked resolution plans to eligible borrowers to the tune of Rs.1,434 crore. On the positive side, the total AUM of STFL grew 6.75% compared to Rs.119,301 crore. Q1 numbers include the results of SFTC, the holding company, and Shriram Automall.

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