Shriram Transport Finance Company (STFC) on Friday reported a 47 per cent decline in consolidated net profit at ₹170 crore for the June quarter due to accelerated provisions against expected credit loss.

The company had registered a net profit of ₹320 crore in the same quarter a year ago. Compared sequentially, the net was down by 77.5 per cent from ₹755 crore in the March 2021 quarter.

Total income during Q1 FY22, however, was higher at ₹4,651.50 crore from ₹4,144.17 crore in Q1FY21, the company said in a regulatory filing.

Interest income rose to ₹4,479.28 crore from ₹4,102.58 crore.

STFC said certain segments of the company's business operations were affected due to the prolonged lockdown imposed by state governments to curb COVID-19 infections.

The company has considered additional expected credit loss (ECL) on loans of ₹261 crore during the June quarter.

“As at June 30, 2021, additional ECL provision on loan assets as management overlay on account of Covid-19 stood at ₹2,852.50 crore," it said.

The assets under management (AUM) stood at ₹1.19 lakh crore by end of June 2021, as against ₹1.12 lakh crore earlier.

The Q1 numbers include the results of STFC, the holding company, and associate firm Shriram Automall India Ltd.

STFC said its board of directors also approved periodical resource mobilisation by issuance of debt securities.

The company plans to issue such instruments on a private placement basis in tranches from August 1 to October 31, 2021, it added.

The flagship company of the Shriram Group, STFC mainly provides finance for commercial vehicle industry. Shriram Transport Finance stock closed 1.38 per cent up at ₹1,391.45 apiece on BSE.

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