See loan growth rebound by September: Shriram Transport Finance

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MUMBAI : Shriram Transport Finance expects loan growth to rebound by September after posting a strong performance in the first quarter. Disbursements from the largest utility vehicle financier amounted to ??12,730 crore, down just 15% quarter over quarter, thanks to a strong pipeline. The company expects loan disbursements to reach third quarter levels by the next quarter.

“The numbers for July were pretty good compared to June. Normally July is not a peak month. We think the months of August and September, when pickup for the sale of new vehicles normally takes place, should be good. Government spending is decent. Infrastructure projects are proceeding on schedule. With all of this, we should be able to do well enough. I think vehicle sales will also be good and our customers will switch to new vehicles. The demand for used vehicles is very good and we expect the demand for vehicles to accelerate as well. September will be a good month, ”said Umesh Revankar, Managing Director and CEO of Shriram Transport Finance.

Shriram Transport Finance announced a 47% drop in its consolidated net profit to ??170 crore for the June quarter due to accelerated provisions against expected credit losses. The company had recorded a net profit of ??320 crore in the same quarter a year ago. In sequential comparison, the net is down 77.5% compared to ??755 crore in the March 2021 quarter. The company experienced 7% year-on-year growth in assets under management, driven by 13% growth in the used commercial vehicle business.

Revankar also said the company is considering a possible merger with Shriram City Union Finance (SCUF), and added that it may not necessarily be a three-way merger as originally planned. SCUF is the consumer finance subsidiary of Shriram Capital.

“We had kept it in a cold store for the past two years due to market uncertainty. We started to look at it. There is no progress. By September we will be able to make a decision, ”he added.

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