See good credit demand in Jan-Mar qtr: Shriram Transport

Written By Unknown on Selasa, 16 Desember 2014 | 15.45

In an interview to CNBC-TV18, Umesh Revankar, MD, Shriram Transport Finance, said the company expects loan growth to pick up in used vehicles

Too early to say how much growth will pick up in used CV

Umesh Revankar

MD

Shriram Transport

Shriram Transport Finance  is in the limelight of late. Though the stock has been under pressure in Tuesday's session, but over the last few days it's been an outperformer compared to Midcap Index. Even brokerage firm UBS has raised the company's target price to Rs 1,400 from Rs 1,175 and terms it to be the best beneficiary of falling crude prices among NBFCs.

In an interview to CNBC-TV18, Umesh Revankar, MD, Shriram Transport Finance, said the company expects loan growth to pick up in used vehicles and sees a good credit demand in January-March quarter.

Below is the transcript of Umesh Revankar's interview with Reema Tendulkar and Sumaira Abidi on CNBC-TV18.

Reema: Can you tell us how will the seminal decline in crude prices benefit the company? Which parameters will improve and by how much?

A: Crude price decrease has helped diesel prices to come down in India to some extent, not fully. Right now there is some escalation and de-escalation clause in most of the long-term contracts. So the prices have come down in the contractual running. Only segment like perishable goods, food grains, there is still good margin for the truckers. So the transporters and truckers who are in the business of carrying food grains, vegetables are likely to gain and have a better margin to some extent. But again more vehicles are likely to get into this segment and bring down the prices, so overall the benefits are not large enough to benefit the customer. However, it is much better than what it was sometime back.

Reema: What will be the benefit to the company, can we expect loan growth to pick up, the asset quality to improve?

A: We expect loan growth to pick up in the used vehicle mainly because when the fuel price comes down, the fuel efficiency may not be the major issue for the customers who like to buy the used vehicles. Earlier people were forced to go into newer vehicles because of fuel efficiency in the newer vehicle, so to that extent, they are relieved, they can still have used vehicle and run the vehicle efficiently, to that extent used vehicle buyers have advantages and we being the company largely financing to used vehicles, I feel there is some advantage for us to increase the loan growth to some extent but right now, the credit growth is not big enough to show that kind of a trend but in the long-term, definitely we feel there is advantage for us.

Shriram Trans stock price

On December 16, 2014, at 14:13 hrs Shriram Transport Finance Corporation was quoting at Rs 1082.00, down Rs 41.2, or 3.67 percent. The 52-week high of the share was Rs 1222.40 and the 52-week low was Rs 550.00.


The company's trailing 12-month (TTM) EPS was at Rs 53.11 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 20.37. The latest book value of the company is Rs 364.65 per share. At current value, the price-to-book value of the company is 2.97.


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