State-owned IFCI on Tuesday reported a 30 per cent decline in its net profit at Rs 120 crore for the quarter ended March 2015 on the back of huge volume of restructuring of accounts undertaken during the period.
IFCI posted a net profit of Rs 170 crore in the January-March quarter of 2013-14.
Total income of the term lender increased by 6.86 per cent to Rs 888 crore as compared to Rs 830.23 crore in the same period a year ago.
“If the restructuring book would not have come in the last quarter it could have been deferred for few more quarters, probably that much hit would not have come in profitability in the Q4 which you are seeing,” IFCI CEO and MD Malay Mukherjee said while announcing the quarterly numbers.
During the quarter, IFCI restructured Rs 1,200 crore loans while the restructuring for the entire fiscal stood at Rs 2,400 crore.
The company had to make provision for the restructuring of assets as per the RBI norms leading to decline in the profitability, he said.
However, the gross non-performing asset ratio as on March 31 stood at 10.3 per cent when compared to 17.3 per cent last year. Net NPA ratio also improved to 7.2 per cent in comparison with 11.4 per cent last year.
Net interest margin of IFCI in 2014-15 fell to 2.2 per cent from 2.7 per cent last year.
The board has recommended a final dividend of 15 per cent dividend or Rs 1.50 per equity share for face value of Rs 10 for 2014-2015.
For the entire 2014-15 fiscal, IFCI recorded a 3 per cent rise in net profit at Rs 522 crore as compared to Rs 508 crore for year ended March 2014.
The current financial year started April IFCI Ltd will register better profits, he added.
Total income during the fiscal increased to Rs 3,348 crore for the year ended March 2015 as compared to Rs 2,953 crore during the previous fiscal.
Provision coverage ratio of IFCI stood at 60 per cent during 2014-15 as compared with 54 per cent last year.
Average cost of funds increased to 9.6 per cent in 2014-15 in comparison with 9.1 per cent last year.
In order to bring cost of funds down IFCI Ltd has approached government to allow the company to raise funds through tax-free bonds.
On the company’s plan to sell its stake in the NSE, Mukherjee said last year the offers were not favourable.
IFCI currently holds 5.44 per cent in NSE and is looking to sell 2.5 per cent of its holding.
