Basic HTML Version
106
MOTORINDIA
l
September 2012
and increasing demand for last-mile
connectivity.
As for STFC’s performance in
2011-12, its total income increased
by 9.12 per cent to Rs. 5,893.88
crores as compared to Rs. 5,401.05
crores in 2010-11. The net profit
stood at Rs. 1,257.45 crores (Rs.
1,229.88 crores).
Penetration into rural centres
Having established a scalable
business model in term of organisa-
tion structure, the year 2011-12 wit-
nessed STFC’s foray into rural areas.
During the year, it opened 14 new
branches with a focus to increase its
customer base. Having created 502
branches across India, the company
took the opportunity to replicate its
business model in the now regions
at lower incremental cost and with-
out compromising on the asset qual-
ity. These centres resulted in lower
capex as well as commanded lower
operation
expenses.
However, these centres
enabled the company
to remain consistently
in touch with its cus-
tomers and provided
it an edge over banks
and other competitors.
At the same time, it
continued to offer new
products and services
to leverage its existing
infrastructure in line
with the growth ambi-
tions of its clients.
Technology as key
differentiator
STFC believes that
technology not only
helps in tracking and
protecting asset qual-
ity, but also allows it to reach to
newer customers with convenience
and better service. To ensure bet-
ter service, the company invested
in replicating access of key infor-
mation on mobile platforms for its
customers as well as field officers
and branches. This leads to consid-
erable reduction in turnaround time
between transactions, provides real-
time access to required information
and also ensures highest standards of
transparency in the customer-com-
pany relationship. STFC have been
able to leverage its well-established
technology systems to maintain trust
and transparency with its clients.
With the depletion in economic
conditions, the company continued
to critically scrutinize each asset
class and ensured lower delinquen-
cies. With the economic uncertain-
ties profound, STFC chose to grow
responsibly rather than grow rap-
idly. As a result, it reduced Loan-
to-value (LTV) ratio by 5 per cent
to mitigate any doubts in earning
capacity. This led to reduced busi-
ness but proved a huge fillip for the
company’s asset quality. STFC also
passed over the increased interest
rates to its customers to protect its
margins amidst uncertainty.
Subsidiary companies
Shriram Equipment Finance
Company Ltd.
India’s earthmoving and construc-
tion equipment industry is expected
to grow six times to $22.7 billion by
2020 from total revenues of $3.3 bil-
vehicle finance
Key hurdles to industry growth:
• Lower availability of road
freight due to lower IIP growth
• Increase in freight rates
• Vehicle price hike
• Higher fuel prices
• Rising interest costs