In an interview with CNBC-TV18, Hemant Kanoria, CMD, SREI Infrastructure Finance Ltd, speaks about the results and his outlook for the company.
He expects 25-30% growth in FY11.
Here is a verbatim transcript of the exclusive interview with Hemant Kanoria on CNBC-TV18. Also watch the accompanying video.
Q: Just walk us through what has led to the big expansion on your top-line first?
A: Actually, this year the results have been much better than our expectation. We were thinking that it will take a longer time for the economy to come back to normal, but infrastructure thrust, which was given by the government, has really helped.
We have seen that the top-line has grown by about 15%, but the bottom-line has grown by almost about 90% on a consolidated basis. Also, our disbursement has risen to about Rs 9,000 crore compared to Rs 6,600 crore which was there last year. So there has been a growth of about 36% on the disbursements. There has been a growth of about 31% on the assets under management, so our book has grown from Rs 10,000 crore to Rs 13,200 crore.
The profit has gone up on a consolidated basis to Rs 156 crore after taxes compared to Rs 82 crore which was there last year. So if we look at it, there has been a substantial growth in all this particular areas. We are back on track to the infrastructure growth.
Q: Your margins were pretty strong at 5% in Q3, what have you been able to report on a net interest margin (NIM) basis this time around?
A: We have been able to maintain that, so after provisions and all, it is about 4.7%. That is also because of the fact that the interest cost was coming down and though we are expecting the interest cost may go up from the third quarter this year, but now it has not substantially happened. So that has also helped us to maintain our profitability and NIMs.
Q: So given the strong trajectory you have seen in Q4, what kind of clip do you think you can work at FY11?
A: The guidance is always on a conservative basis, so last year also we felt that we should be in a position to grow at 25-30%, but the profits have grown at about 90%. So the team has done an excellent job, but at the same time we do not want to be very aggressive where this year is concerned. So we do not know the interest rates may go up and what other stimulus package the government may withdraw. What kind of effects that we can have with the problems we have in Greece and all the other places in Europe. On a conservative basis, 25-30% is what we should be in a position to maintain, but we will have to see as the quarters go by that where do we actually get to.