Shriram City Union Finance shares surged as much as 8 per cent to hit 52-week high of Rs 2,049.95 on Friday after the non-banking financial company reported better than estimated earnings for the June quarter. he Chennai-based company reported 23 per cent jump in its net profit at Rs 182 crore compared with profit of Rs 148 crore in the corresponding quarter of last financial year. Shriram City Union Finance’s revenues grew 15 per cent to Rs 1,053 crore. Subhasri Sriram, executive director & CFO at Shriram City Union Finance told Profit that small enterprise finance book, a major growth driver for the company grew at 25 per cent in the June quarter and supported profit.
Our borrowing cost has come down to 10.09 per cent from 10.8 during the same quarter last year,” Ms Sriram added. Meanwhile, domestic brokerage Religare in a note said Shriram City Union Finance’s first quarter net profit of Rs 182 crore was higher than their estimates on the back of better margins and asset quality.
It added that Shriram City Union Finance’s gross non-performing assets (NPA) remained stable at 5.11 per cent with NPA coverage remaining healthy at more than 70 per cent.
Religare expects its asset quality to improve going ahead and has a “buy” call on the stock for target price of Rs 1,950.
Shriram City Union Finance shares closed 3.42 per cent higher at Rs 1,970 compared to 0.56 per cent decline in Sensex.