Shriram City Union Finance Ltd. (Shriram City), a Chennai-based leading Non-Banking Financial Company, part of the Shriram Group announced the financial results for Q1FY22 today. Assets Under Management (AUM) rose by 4% YoY to INR 29,599 Cr, the highest levels since Sep-19. Disbursements were higher at INR 4,560 Cr, up 244% YoY on a low base, but 30.6% lower sequentially. Profit After Tax rose by 8.2% YoY to INR 208 Cr in Q1FY22 compared to INR 192 Cr last year.
Asset quality improved year on year, with Gross Stage 3 levels at 6.91% (7.28%: Q1FY21 and 6.37%: Q4FY21). With Expected Credit Loss (ECL) provision of INR 1,055 Cr in Q1FY22, total provision coverage ratio stood at 51.73%. Restructured loans worth INR 39 Cr in Q1FY22. The company expects substantial rollbacks as lockdowns ease Q2FY22 onwards. The company has liquidity back up of INR 4,439 Cr as of end Q1FY22.
SME loans, contributes 49% of the total AUM and saw disbursement of INR 1,102 Cr. The company is among the largest Two-Wheeler(2W) financers, with 2W loan disbursements for the quarter at INR 1,000 Cr, up 53.4% YoY. Gold loans disbursements rose 124% to INR 1,454 Cr in Q1FY22, as the pandemic forced cash strapped Indians to seek Gold Loans. Personal Loans and Pre-owned 2W Loans showed a steady rise, with disbursements of INR 602 Cr & INR 227 Cr respectively.
Shriram Housing Finance Ltd, a Subsidiary of Shriram City providing affordable home loans had a strong Q1FY22, with AUM growth of 65% YoY to INR 3,910 Cr compared to INR 2,369 Cr in Q1FY21. Disbursements for the quarter remained subdued at INR 221 Cr, impacted by state level lockdowns. PAT grew by 82% YoY to INR 10.9 Cr compared to INR 6 Cr last year. Stable Asset quality with Gross Stage 3 assets declining to 2.32% compared to 2.34% last year.
Commenting on the performance Mr. Y.S. Chakravarti, MD & CEO, Shriram City said: “Q1 was affected due to lockdowns, while Jun-July has shown remarkable improvements and normalcy is expected in Q2FY22. MSMEs perceive access to finance as the most significant obstacle, and we continue to bridge their funding gap, while keeping a keen eye on quality originations. Through digitization we have been able to unlock some bottlenecks faced by customers. The two-wheeler loan market is expected to see higher demand as covid recedes, since need for mobility remains high and electric vehicles are presenting new opportunities. Gold finance continues to be a focus area for us and we will make deeper inroads into this segment in FY22. Shriram Housing Finance had a stellar Q1FY22, with AUM growing 65% and will take strides in FY22 with the cross-sell program ‘Griha Poorti’, by expanding into 170 branches of Shriram City.”