Shriram Transport Finance Company: Good Numbers In A Bleak Environment
DSIJ Intelligence / 07 May 2013
Shriram Transport Finance Company has managed to put in a better financial performance for FY13 despite a difficult economic scenario
Shriram Transport Finance Company (STFC) which is a flagship company of Shriram Group announced its March 2013 quarter results. The results seem to be in line with street estimates where the bottomline of the company has increased to Rs 383.46 crore in Q4FY13 as against Rs 375.33 crore in December 2012 quarter and Rs 328.77 crore in March 2012.
If we take a deeper look in the financial performance of the company, the topline of the company has witnessed a good up-move. However due to a higher interest rate scenario, there has been pressure on its margins resulting in a negatively impacted bottomline.
In terms of segment-wise performance, the financing activity segment witnessed good traction while its service division witnessed marginal improvement. Performance of the trading division though remained subdued, in line with the performance in the quarter ending December 2012. The operational performance was also on lines with the financing segment, marking the highest contribution. Though the services division was profitable, profitability declined significantly to Rs 3.64 crore in Q4FY13 as against Rs 8.80 crore in Q4FY12.
In terms of yearly performance, the bottomline for FY13 stood at Rs 1463.42 crore in FY13 as against Rs 1308.81 crore in FY12. A point that is noteworthy is that at the end of FY13, there were pledged shares to the tune of 4.20% while there was no pledging of shares as of the year ending March 2013.
The management has announced a dividend of Rs 4 per share. The company had earlier announced an interim dividend of Rs 3 in October 2012. So the total dividend for FY13 stands at Rs 7 as against Rs 6.50 in FY12.
As far as other figures are concerned, total assets under management as on March 31, 2013 stood at Rs 49676.01 crore as against Rs 40213.90 crore in March 2012. We feel in a scenario where most of the automobile market is under pressure, STFC has put in impressive numbers. As and when the automobile market picks up one can see a good up-move in the stock prices of STFC. We recommend investors to hold the counter.
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