Shriram Transport Shares Rally 19% As Asset Quality Improves In Q3FY21

Shares of Shriram Transport Finance (STFC) surged as much as 19% in trade on January 29, 2021 to Rs. 1319 per share on the NSE owing to heavy volumes. This is after the NBFC firm reported an improvement in its asset quality for the December ending quarter of FY21.

The company's gross NPA and net NPA ratio came in at 5.33 per cent and 3.22 per cent, respectively in comparison to 8.7 per cent and 6.09 per cent during the same quarter last year. "However such accounts have been classified as stage 3 and provisioned accordingly. Had the company classified these borrower accounts as NPA after August 31, 2020, the company's Gross NPA and Net NPA ratio would have been 7.11 per cent and 4.31 per cent, respectively," Shriram Transport Finance said.

Collection efficiency in the three months post the moratorium period from September to November came in between 95-97% and was further augmented to 104 percent in December, said the company.

Also, STFC's PAT for the Q3 period declined 17 percent YoY to Rs. 728 crore due to the higher Covid provisioning of Rs. 225 crore. . The provision towards impairment on financial instruments inched higher 52 per cent YoY to Rs 675 crore. And total Assets under Management (AUM) grew 5.5 per cent to Rs 1.14 trillion from Rs 1.09 trillion.

The NBFC company further announced that it will consider amassing funds through issuance of debt securities in onshore/offshore market by private placement basis and/or public issue during the month ending February 28, 2021.

At around 12:10 pm, the scrip of STFC traded higher by 16.25% at Rs. 1291.60

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