Shriram City’s profit up 13% in Q1 on growth in MSME segment

PE-backed Shriram City Union Finance Ltd, a deposit taking non-banking finance firm of the Shriram Group, reported a net profit after tax of Rs 117.42 crore in the quarter ended June 30, 2013, up 13.54 per cent, compared with Q1 FY13.

Net interest income was Rs 432.40 crore compared with Rs 370.94 crore in Q1 FY13, while net interest margin for the quarter stood at 11.08 per cent.

GS Sundararajan, managing director of Shriram City, said, “Shriram City has registered healthy growth in top-line despite reducing its gold book to optimum levels. MSME segment will continue to be the growth engine for Shriram City during this year.”

The gross spread of assets under management (AUM) stood higher at 11.08 per cent in the quarter compared with 10.48 per cent last year.

The small enterprises finance business grew 10 per cent quarter on quarter while the two wheelers business grew 7 per cent. Loans against gold, auto loans and personal loans recorded declines of 21 per cent, 8 per cent and 6 per cent, respectively, in Q1 FY14.

The firm’s gross non-performing asset levels stood at 2.29% as on June 30, 2013; capital adequacy was 19.87 per cent.

Last week, TPG-backed Shriram Capital raised its holding in Shriram City to 61.8 per cent by converting warrants into equity. Shriram Capital had subscribed to fresh shares and convertible warrants in March 2012, and completed the conversion of the securities into shares in two tranches over the past two months. (see: Shriram Capital hikes stake in Shriram City Union Finance to 61.8%).

Existing PE investors in Shriram City include Norwest Venture Partners and Bessemer Venture Partners.

The company’s share price last was trading at Rs 954.95 a unit, up 0.45 per cent during market hours on the BSE in a weak Mumbai market on Friday.

(Edited by Joby Puthuparampil Johnson)

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