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Below are Views On Shriram Transport Finance reported a good set of numbers for Q3FY21 By Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd

Shriram Transport Finance reported a good set of numbers for Q3FY21 as NII grew by 5% YoY to Rs. 2,148 crore for the quarter. Fees & other income for the quarter were down by 73% YoY to Rs. 23 crore. Total net income for the quarter was up by 1.0% YoY to Rs. 2,172 crore while operating expenses for the quarter was down by 1.0% YoY to Rs. 508 crore. While pre provisioning profits for the quarter was up by 2.0% YoY to 1,664 crore there was a sharp increase in credit costs by 52.0% YoY to Rs. 675 crore which led to a fall in PAT by 17.2% YoY to Rs. 728 crore. Disbursements for the quarter have also recovered to pre Covid levels with the company registering YoY growth in disbursements as a result of which loan book grew by 5.5% YoY to Rs. 1,14,932 crore. The company continues to remain adequately capitalized with a CAR of 21.9%. Asset quality continues to surprise positively as GS3 has reduced YoY from 8.71% to 7.11% while NS3 reduced YoY from 6.09% to 4.31%. The company will invoke restructuring to the extent of Rs. 2,267 crore over the next few quarters which is around 2.0% of the book. Overall the company reported a good set of numbers for the third quarter both in terms of business growth as well as asset quality front and we continue to maintain our BUY rating on the stock with a target price of Rs. 1,440.

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