STFC announced their results last night. It has been a very tough quarter for the NBFC’s working through the liquidity crisis that has ravaged the sector. Considering the circumstances, I had braced myself for a blood bath from Shriram Transport this quarter. While the provisions and the NPA’s are sequentially up, they are only marginally so and could have been a lot more worse considering the circumstances.
Key metrics of ROA, ROE and provisioning continue to hold up pretty okay given the tough environment. Given the nature of the clientele that Shriram Transport caters go, which is the single owner trucking industry, it is not surprising to continue to see a large stage 3 asset book but very little seem to convert into actual write-offs.
What will be interesting to hear from the management will be the liability mismatches, liquidity and repayments during the conf call. Other than that, as an investor, I just have to sit and brace for another quarter of bad headlines and watch paint dry as the fundamentals continue to hold for STFC.
Beowulf Capital 