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Shriram City Union Q1 Review - No Major Deterioration In Asset Quality; Restructuring Minimal: Motilal Oswal

Shriram City Union Q1 Review - No Major Deterioration In Asset Quality; Restructuring Minimal: Motilal Oswal

<div class="paragraphs"><p>A customer holds Indian rupee notes at a store in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
A customer holds Indian rupee notes at a store in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Shriram City Union Finance Ltd. posted profit after tax of Rs 2.1 billion (up 8% YoY; 14% miss) in Q1 FY22.

Pre provision operating profit was largely in-line at Rs 5.7 billion (flat YoY).

While net interest income stood at Rs 8.8 billion (in-line), credit costs stood at Rs 2.9 billion (~16% above estimate), leading to the profit after tax miss.

Q1 FY22 was characterised by a sequentially muted performance in disbursements (due to lockdowns) and ~55 basis point deterioration in gross state III.

Shriram City Union Finance should deliver return on equity/return on asset of ~14%/4% in FY23E.

Click on the attachment to read the full report:

Motilal Oswal Shriram City Finance Q1FY22 Result Update.pdf

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