Growth outook remains tepid: SHTF is comfortable with 12-15% of growth and
continues to maintain LTVs at ~65% and does not want to compromise on
quality for growth. SHTF also noted they have restricted the growth on
construction equipment business as well. SHTF was positive on rural centres
where they have increased presence through small centres which could be
converted to branches in line with the increase in business. As of now ~20-30%
of transactions are being sourced through its Automalls.
Margins: Due to competition in new CV business, hence large part of the growth
will have to be driven by higher margin old CVs. Margins have come off in FY12
by ~30bps to ~7.5% and they expect margins to stay in the 7.3-7.7% range.
Asset quality‐ Not as cautious as peers: SHTF has recognised all mining related
assets and does not expect any negative surprise. Management re-iterated that
only ~20% of their exposure is in industrial transportation and other ~80% is
linked to transportation of essentials and does not expect material deterioration
in asset quality. With overall freight availability coming off, impending diesel
price hike and negative feedback on peers like HDFC/KMB we remain cautious
on the CV cycle.
Accessing regulations: (1) Final securitisation guidelines warrant moving the off
b/s sheet book from direct assignment to PTC route. Though management
believes that impact will be limited, actual implementation will be tested only in
2H which is a seasonally qtr for securitisations. (2) On the 90 v/s 180 day NPA
recognition, management believes that transition time will be large (3-4 yrs) and
feedback from RBI also suggested that the implementation will happen in a nondisruptive
manner
No comments:
Post a Comment