Shriram Transport Finance bets on construction equipment segment; expects 10% AUM growth in FY22

In an interview with CNBC-TV18, Umesh Revankar, Vice Chairman and Managing Director, Shriram Transport Finance Company, said he sees huge interest in construction equipment segment, in fact, he expects it to outperform other products.

“For us, the demand is coming not only from pre-owned vehicles but it is coming from construction equipment; there is a huge interest in construction equipment and construction-related vehicles and we feel that it will outnumber other segments for another couple of quarters,” Revankar said.

According to him, disbursals in Q4 will be higher than Q3 numbers. He expects assets under management (AUM) growth to be at 10 percent in FY22. “We should be doing significantly higher number than January, and March is always big. So Q4 will definitely be bigger than Q3,” Revankar said.

On the cost of funds, he said that he is seeing an improvement on a quarter-on-quarter (QoQ) basis. Giving details, he mentioned that 80 bps improvement has been seen in cost of borrowings in the last 12 months.

On the Reserve Bank of India’s clarification on non-performing assets (NPA), he said that they have moved onto the new regulation on the daily stamping of NPAs. However, he believes that small customers face a challenge in fast repayment and hence, they should be given more time. Elaborating on the NPAs, he explained that the gross NPAs for the company rose by 80 basis points (bps) in Q3. However, he clarified that despite RBI’s relief, they won’t be changing their stance on NPA recognition.

“We have moved on so we do not want to make any changes. So we would be able to communicate to our customers and try to bring them on date payment rather than month-end payment,” said Revankar.

Watch the video for the full interview