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Systematix Research Report
Shriram Transport Finance Company Ltd. reported a profit of Rs 1.7 billion in Q1 FY22 due to higher provisions.
With a good harvest and normalising Covid-19 situation, provision write-backs are likely in H2 FY22E.
Shriram Transport Finance’s stage-III provision is at 44.2%, which seems prudent.
Its liquidity buffer is at 13% of total assets, which can cater for next five to six months repayments.
Disbursements and collections are bouncing back to pre-Covid-19 levels.
We remain sanguine about a disbursement run-rate of Rs 120 billion in FY22E and normalisation of credit costs in FY23E.
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