Highlights:

The quarter was in line with the expectation of the company. The company was focused on getting back to growth in its core business. The focus was on collections and recoveries from NPA accounts.

As per the company, the economy has reverted back to semi-normalcy. The monsoon rainfalls was good, crop yields were good, while cash-flows from some of the state governments are being paid in installment basis.

The rural sentiments are holding up well and the company is seeing demand for vehicles at dealerships. The footfalls at dealerships and rising but the problem is only the non-availability of vehicles.

Tractor segment is muted due to low demand from contractor segment. The farm side demand for the tractor is good.

The company has regained its leadership position in the tractor business.

The commercial vehicle segment is seeing movement from the fleet operators side, while the high prices of vehicle are impacting the demand.

The demand is healthy in the pre-owned vehicles segment. However, the non-availability of new vehicle is avoiding customers from exchanging their old vehicles.

OEMs are indicating at improvement in the supplies, which can boost disbursements ahead.

The company has improved collection efficiency to 100% in December 2021 and 95% in 3QFY22. Many customers are paying their existing installment and even paying additional installment which helped in reduction of Stage 2 and Stage 3 loan book.

The company expects to maintain disbursements growth trajectory and will maintain stable collection efficiency.

The company reduced opex to asset ratio to 2.7% with various actions taken yielding positive outcomes.

The company had guided at end of Q1FY22 to reverse 80% of the provisions taken in Q1FY22 by end March 2022. Over 60% of the provisions created in Q1FY22 were reversed till December 2021.

The company expects to maintain stable margins.

The company has improved collection efficiency driven by collection war-rooms and different team set up for different product segments.

The company expects provisions of Rs 500-1500 crore in Q4FY22, which would help to reduce Net NPA below 4% by March 2022 to meet PCA norms of NNPAs of below 6%.

The company also aims reduce gross stage 3 loans by March 2022 to level seen at the beginning of the year.

As per the company, around 17% of the borrowings of the company are linked to external benchmark linked rates.