PAT declined by 11% QoQ to INR9.65b (in line) in 1QFY23, driven by a sequentially higher credit costs of ~2.5% and a NIM decline of ~20bp QoQ. Price hikes in both New and Used CVs (led by the shift to BS-VI emission standards and higher steel prices) has continued to feed into higher ticket sizes and are aiding disbursements, which grew 31% YoY to ~INR117b. SHTF's customers and products operate in a benign competitive landscape. It has the pricing power to pass on the higher incremental cost...
The independent financial analyst theScreener just requalified the risk of SHRIRAM TRANSPORT FINANCE COMPANY (IN), active in the Speciality Finance industry. As regards its fundamental valuation, the title receives a new star(s) and now shows 2 out of 4 possible stars. Its market behaviour, however, has slightly deteriorated and can be qualified as risky. theScreener considers that these elements lead to an overall rating downgrade to Slightly Negative while the title remains exposed to strong p...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
SHRIRAM TRANSPORT FINANCE: Healthy disbursements; NIM and credit costs surprise negatively (SHTF IN, Mkt Cap USD5b, CMP INR1391, TP INR1600, 15% Upside, Buy) PAT declined by 77% QoQ and 47% YoY to INR1.7b in 1QFY22 (~71% miss). Credit cost was elevated at INR14.4b (~4.9% annualized). Reported NIM at 6.4% was impacted by higher interest expenses and excess liquidity on the Balance Sheet. Disbursements were strong (down 15% QoQ), albeit a little surprising, even in a COVID-disrupted quarte...
A director at Shriram Transport Finance Company Limited sold 3,250 shares at 1,445.099INR and the significance rating of the trade was 69/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors ove...
Q3FY20 result highlights STFC posted in line operating performance but higher than expected PAT as credit costs were lower than expected. PAT of Rs8.8bn was higher than our and consensus estimate of Rs7.1bn and grew 38% yoy / 15% qoq. Gross stage 3 loans remained stable qoq while stage 2 loans (30-60 dpd) declined qoq. Improving asset quality in a weak macro is a key positive. While operating performance was in line it was weak with subdued AUM growth and flat NII due to a weak CV cycle. AU...
Shriram Transport Finance: Asset quality surprises positively; upgrade estimates by ~8% (SHTF IN, Mkt Cap USD3.1b, CMP INR987, TP INR1385, 40% Upside, Buy) SHTF reported 38% YoY growth in PAT to INR8.8b (27% beat). While operating profit was flat YoY at INR16.3b (3% beat), a 30% YoY decline in credit costs (34% beat) led to the strong PAT performance. NIM shrank 5bp/30bp QoQ/YoY to 7.14% GNPL ratio improved 10bp QoQ, driven by lower net slippages (-45% YoY to INR5.3b), while PCR was stab...
(SHTF IN, Mkt Cap USD3.6b, CMP INR1124, TP INR1385, 23% Upside, Buy) SHTF's core PBT was largely flat YoY at INR9.3b (12% beat). However, given the lower tax rate, PAT increased 26% YoY to INR7.7b (23% beat). The quarter was characterized by slowing AUM growth and stable NIM/asset quality. Disbursements were up 8% QoQ to INR133b, largely driven by a 9% increase in used vehicle disbursements. However, given the high repayment rate in this business, AUM grew 2% QoQ (+4% YoY) to INR1.1t. Wi...
Q1FY20 result highlights SHTF ‘s PAT of Rs6.3bn grew 11% yoy but declined 15% qoq. Earnings were in line with our estimate, with a beat on NII which was offset by higher provisions. After weak earnings from many companies in the BFSI segment, an in-line result without any provisioning shocks is a positive. AUMs grew 6% yoy and 2% qoq. Pre-owned vehicle loans grew 7% yoy, new vehicle loans declined 6% while working capital loans grew 53%.The yoy increase in working capital loans looks big but...
SHRIRAM TRANSPORT FINANCE: AUM growth modest; Margins and asset quality in line (SHTF IN, Mkt Cap USD3.2b, CMP INR986, TP INR1300, 32% Upside, Buy) 1QFY20 PAT of INR6.3b was in line with our estimates. Disbursements declined ~9% YoY to INR122b driven by ~65% decline YoY in new vehicle disbursements. After two quarters of decline, used vehicle disbursements grew 3% YoY to INR113b. As a result, AUM grew 2% QoQ/ 6% YoY to INR1.06t. Growth in M&LCV remains healthy at 15% YoY, while it was s...
Shriram Transport Finance | Annual Report Update: Growth decelerating; Higher write-offs drive lower stage 3%; Slippages remain elevated (SHTF IN, Mkt Cap USD3.5b, CMP INR1043, TP INR1300, 25% Upside, Buy) Our analysis of Shriram Transport Finance's (SHTF) FY19 annual report indicates that the company has diversified its borrowing mix by raising INR100b from ECBs and retail NCDs (largely equal). But, these sources have been more expensive - the total landed cost of ECBs is ~10%, while tha...
Q4FY19 result highlights STFC’s PAT of Rs7.5bn grew 17% yoy but declined 22% qoq. While PPOP declined 6% yoy and was below our estimate by 7% due to slow loan growth and lower NIMs, tax write backs for prior period and provisioning reversal due to review of PD/LGD in 4Q drove an 11% beat on PAT. Disbursal and AUM growth remained weak due to slower election spend, STFC consciously cutting down LTVs and weak OEM sales. Disbursals declined 25% yoy but grew 22% qoq. AUMs grew 9% yoy and 1% qoq ...
Shriram Transport Finance: Liquidity pressure continues to weigh on growth (SHTF IN, Mkt Cap USD3.3b, CMP INR1028, TP INR1325, 29% Upside, Buy) SHTF reported 4QFY19 PAT of INR7.5b (19% beat), largely by lower credit costs and tax rate. PPoP grew 3% YoY (5% miss) due to a contraction in margins by 40bp YoY and moderate AUM growth of 9% YoY. Liquidity pressure continues to weigh on loan growth. Used vehicle loans grew 1% QoQ (+8% YoY) to INR871b. However, over the past few quarters, the new v...
SHRIRAM TRANSPORT FINANCE: Liquidity crunch weighs on growth across segments(SHTF IN, Mkt Cap USD3.3b, CMP INR1028, TP INR1400, 36% Upside, Buy) Shriram Transport Finance (SHTF) reported 3QFY19 PAT at INR6.4b, in line with of our estimate of INR6.2b (17% YoY growth). However, largely flattish AUM QoQ surprised negatively. Liquidity crunch in the system impacted disbursements (down 32% QoQ and 30% YoY). Company increased securitization book during the quarter to INR193b v/s INR166b a quarter ago...
STFC’s PAT of Rs6bn grew 23% yoy and 6% qoq and was higher than the consensus estimate of Rs5.8bn. The beat was on account of better than expected NIM. Disbursals grew 12% yoy and 3% qoq. AUM growth remained strong at 21% yoy and 3% qoq. The growth in new vehicles and business loans continues to outpace growth in used CVs. Used CV AUMs grew 15% yoy and 3% qoq. New CV AUMs grew 46% yoy and 5% qoq. Business loans and working capital loans grew much faster at 12% qoq (105% yoy) and 15% qoq (80% ...
SHRIRAM TRANSPORT FINANCE: 2Q performance strong; Reiterating growth guidance of 18-20% (SHTF IN, Mkt Cap USD3.7b, CMP INR1072, TP INR1400, 31% Upside, Buy) Shriram Transport Finance (SHTF) reported 2QFY19 PAT at INR6.1b, 5% ahead of our estimate (22% YoY growth), helped by strong AUM growth and slight improvement in NIM. Disbursements were up 12% YoY to INR138b; however, used vehicle disbursement growth was moderate at 8%. AUM grew 21% YoY to INR1.05t, led by strong growth across all s...
Q1FY19 result highlights STFC’s PAT of Rs5.8bn was 6% higher than our estimate and grew strongly at 24% yoy and 295% qoq (on a low base). Disbursement and AUM growth remain strong. Disbursements grew 24% yoy but declined 11% qoq due to seasonality. AUMs grew 22% yoy and 6% qoq. The company has disclosed working capital and business loans separately. The two segments combined total to Rs49bn/4.8% of AUMs and have grown 101% yoy. AUMs for new vehicles grew strongly at 48% yoy while used AUMs g...
Shriram Transport Finance: AUM growth surprises positively; Ind-AS transition raises BV by ~8% (SHTF IN, Mkt Cap USD4.7b, CMP INR1410, TP INR1650, 17% Upside, Buy) Shriram Transport Finance (SHTF) reported PdAT of INR5.73b under Ind-AS (25% YoY growth), helped by strong AUM growth, largely flattish margins (7.41% v/s 7.44% a year ago) and provisioning expenses (+4% YoY). Key positives: (a) Strong AUM/disbursement growth of 22%/24% YoY. b) Stable GNPA (under earlier accounting) QoQ of IN...
We believe the valuation multiple of Shriram Transport (STFC) will de-rate with concerns emerging on inter-group transactions. We are cutting our target multiple by 30% to 1.8x following the disclosure that STFC has guaranteed the NCD of a loss-making group company SVL. We downgrade the stock to Neutral. STFC’s business growth, which recovered in 3Q18, continues to gain strength with 1Q19 likely to be a strong quarter. However, we believe concerns on inter-group dealings will overwhelm in the cu...
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