The Hindu Business Line : Magma Shrachi Finance PAT up 56% at Rs 31 cr

Magma Shrachi Finance Ltd (MSFL), the new merged entity of Magma Leasing and Shrachi Infrastructure Finance effective from April 1, 2006, for the year ended March 31, 2007, has recorded a 55.7 per cent increase in profit after tax to Rs 31.4 crore (Rs 20.1 crore). Net income from operations for the period under review has increased to Rs 278.3 crore from Rs 151.5 crore in 2005-06.

Announcing the results here, Mr Sanjay Chamria, Vice-Chairman and Managing Director of the company, said the total asset base was up by 72 per cent to Rs 5742.5 crore ($1.4 billion) as on March 31, 2007, from Rs 3334.3 crore in the previous fiscal. Total disbursements have increased by 39.8 per cent to Rs 2,544 crore (Rs 1,819.7 crore).

Mr Chamria conceded that the 2006-07 results of the consolidated new entity cannot strictly be compared with the pre-merger set up in 2005-06, when the balance sheet size was much smaller. Asked what makes him so upbeat about the future performance of MSFL, despite rising interest rates, he said “we continue to see good demand prospects, as we are able to maintain our net interest margins by being able to pass on the increase to our customers”. Disbursements in the first three months of the current fiscal at over Rs 730 crore, showing an increase of 67 per cent over that in the previous corresponding first quarter, was a comparable figure. Operating profits for 2006-07 were at Rs 54.8 crore (Rs 30.8 crore), up by 79 per cent.

He said for the fourth quarter ended March 31, 2006, total disbursements were at Rs 893.4 crore against the Rs 663.2 crore in the corresponding quarter of previous quarter. Net incme for the said quarter was put at Rs 96.6 crore (Rs 50.4 crore), up by 91 per cent.Pointing out that the fee-based income continued to deliver superior performance, Mr Chamria said following the merger with Shrachi Infrastructure Finance, there was immense potential to tap new customers in rural and semi-urban areas owing to the pan-India customer base of the combined entity.

According to Mr Ravi Todi, Joint Managing Director, a special team has now been created to spread MSFL’s wings in South, where competition for vehicle financing, particularly CVs was quite intense. MSFL’s diversified portfolio now covered commercial vehicle finance, car and utility vehicle finance, and financing of construction equipment and used CVs, strategic construction equipment and fee-based businesses.