Money & Banking

‘Lockdown to hit profitability of Sakthi Finance’

Our Bureau Mumbai | Updated on May 28, 2020

Coimbatore-based Sakthi Finance Ltd (SFL), on Thursday, said its profitability during the year (FY21) will be impacted in view of nationwide lockdown, which has been necessitated to contain the spread of the Covid-19 pandemic.

The 65-year-old company, which is in the business of commercial vehicle and construction equipment financing, said its offices remained partially shut from March 25due to the lockdown and partially re-opened on May 2.

With the lockdown continuing, business stands adversely affected, the non-banking finance company said a stock exchange filing.

As March 1to August 31is the moratorium period for borrowers, the company assessed that its income and profitability are likely to be adversely impacted.

“The company has extended moratorium to its customers who opt for it as per RBI Directions. Demand for services can start only when the lockdown is lifted completely,” SFL said.

As per the regulatory filing, borrowers under existing hire purchase agreements will tend to defer their commitments towards repayment in view of the moratorium, and it will impact the company’s business till the continuance of moratorium period.

The company said the moratorium has affected the cash flows. However, it is striving to manage.

“There are tight liquidity conditions, but will be managed. The company has serviced all its debt obligations in time till now,” emphasised SFL.

According to credit rating agency ICRA, SFL, which has operations across Tamil Nadu, Kerala, Andhra Pradesh and Karnataka, had total managed assets of ₹1,123 crore as of September-end 2020.

Published on May 28, 2020

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