Shriram Housing Q2 net almost flat at Rs 18.8 cr

Affordable housing player Shriram Housing Finance on Wednesday reported Rs 18.8 crore net profit for the September quarter, up almost 5 per cent from the same period last year, despite improved asset quality, robust advances growth and the resultant spike in interest income.

Disbursements were better than the pre-pandemic levels at Rs 633 crore compared to Rs 517 crore in Q2FY21 and Rs 221 crore in Q1FY22, Ravi Subramanian, MD & CEO of the company said, adding asset quality improved with gross stage 3 assets improving by 36 bps to 1.72 per cent.

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Asked why the bottomline is flat despite robust loan sales and interest income, Subramanian told PTI that in Q2 last year they had a direct assignment income or securitisation income of Rs 24.2 crore, boosting profit, but the same this year was only Rs 6.6 crore.

Had it not been for the assignment income, net income in the reporting quarter would have been Rs 18.9 crore and just Rs 4.2 crore in Q2FY21, showing a profit growth of 351 per cent, he explained.

Also, sans the assignment income, total income last year would have been Rs 89 crore and with this it was Rs 113 crore while this year total income is Rs 129.6 crore, he said, adding we chose not to sell the assets in a falling interest rate regime to banks.

Interest income rose to Rs 113 crore from Rs 75 crore on-year but net interest margin declined on falling interest rates to Rs 59.5 crore from Rs 62.9 crore.

Assets under management of the Shriram Group company grew 53 per cent to Rs 4,255 crore compared to Rs 2,779 crore in Q2 FY21.

The collection efficiency rose to 99.5 per cent in Q2 and the expected credit losses provision stood is Rs 49.8 crore, resulting in total provision to asset ratio at 1.34 per cent.

The total stage 3 provision coverage ratio stood at 69.8 per cent, he said, adding capital adequacy ratio stood at 25 per cent.

Subramanian said affordable home loan disbursals surpassed the pre-pandemic levels as we expect the disbursal run-rate to continue in H2 and we are already witnessing strong festive season demand from small towns.

Shriram Housing Finance, promoted by Shriram City Union Finance, commenced operations in December 2011 and operates 84 branches.