Shriram Transport Finance Company (STFC) reported a 47 per cent year-on-year (y-o-y) drop in first quarter standalone net profit at ₹170 crore due to increased provisions towards impaired loans and rise in employee benefit expenses.

The company, which is a leading player in the pre-owned commercial vehicle financing segment, had reported a net profit of ₹320 crore in the year-ago quarter.

Interest income was up 9 per cent y-o-y to ₹4,479 crore (₹4,103 crore in the year-ago quarter).

During the reporting quarter, STFC made a net gain on “derecognition of financial instruments under amortised cost category” amounting to ₹101 crore (nil in the year-ago period).

Finance costs were up 10 per cent y-o-y at ₹2,498 crore (₹2,267 crore).

Net interest income (difference between interest earned and interest expended) rose 14 per cent y-o-y to ₹2,107.45 crore (₹1,842.54 crore).

Provisions made towards impairment on financial instruments rose 35 per cent y-o-y to ₹1,440 crore (₹1,065 crore). During the reporting quartet, the company considered an additional ECL provision of ₹261 crore on loans on account of Covid.

The company invoked resolution plan to relieve Covid 2.0 pandemic-related stress of eligible borrowers worth ₹1,434.14 crore. Of this, as on June 30, 2021, it restructured loans of 10,257 eligible borrowers accounts worth ₹342.53 crore.

Gross Stage 3 assets (which are considered credit-impaired) rose about 8 per cent y-o-y to ₹9,658 crore (₹8,931 crore).

As of June-end 2021, assets under management were up 6.75 per cent y-o-y to ₹1,19,301 crore (₹1,11,756 crore as of June-end 2020).

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