About the company:

Shriram Finance Limited is one of India’s leading non-banking financial companies (NBFCs), specializing in retail and commercial lending. It was formed after the merger of Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital. The company offers a wide range of financial products, including vehicle loans, MSME loans, gold loans, personal loans, and fixed deposits, catering primarily to small businesses, self-employed individuals, and underserved segments. With a strong rural and semi-urban presence, Shriram Finance focuses on financial inclusion and credit accessibility, leveraging its deep customer relationships and extensive branch network across India.

Key Business Highlights

✅ Strong Loan Growth:

  • MSME & Vehicle Loans driving growth
  • Passenger vehicle financing expanding rapidly
  • EV financing new vertical launched in December

✅ Stable Asset Quality:

  • Stage 3 assets saw a marginal increase, but credit cost remains under 2%
  • Used vehicle prices remain high, helping maintain recoveries
  • MSME loans show some stress, but management expects improvement in Q4

✅ Liquidity & Borrowings:

  • Total Debt Outstanding: ₹2,00,023 crores
  • Cost of Borrowing: 8.95% (slightly lower than Q2)
  • Strong Liquidity: ₹27,000 crores, covering 6 months’ liabilities

✅ New Growth Areas:

  • EV financing vertical launched in December
  • Passenger vehicle loans gaining market share
  • Construction equipment & commercial vehicle financing remains strong

Growth & Future Outlook

📌 Q4 Expected to be Strongest Quarter:

  • Increased demand for new vehicle loans
  • Improved government infrastructure spending
  • Shriram Finance expects mid-teens AUM growth for FY26

📌 Long-Term Focus Areas:

  • Expanding MSME & vehicle financing
  • Scaling EV lending & green financing
  • Leveraging digital initiatives to enhance efficiency

Shriram Finance Financial Performance – Last 3 Quarters (FY25)

Financial MetricQ3 FY25Q2 FY25Q1 FY25
AUM₹2,54,470 crores₹2,43,043 crores₹2,30,012 crores
Disbursements₹43,766 crores₹41,375 crores₹39,800 crores
Net Interest Income (NII)₹5,823 crores₹5,772 crores₹5,589 crores
Net Interest Margin (NIM)8.48%8.74%8.82%
Profit After Tax (PAT)₹3,570 crores (incl. one-time gain)₹1,927 crores₹1,852 crores
PAT (Excl. One-time Gain)₹2,080 crores₹1,927 crores₹1,852 crores
Cost-to-Income Ratio28.6%27.9%27.5%
Gross Stage 3 Assets5.38%5.32%5.45%
Net Stage 3 Assets2.68%2.64%2.71%
Credit Cost1.85%1.84%1.89%
Total Debt Outstanding₹2,00,023 crores₹2,07,000 crores₹2,04,750 crores
Cost of Borrowing8.95%8.97%8.92%
Liquidity Reserves₹27,000 crores₹17,000 crores₹18,500 crores

 

Recent updates:

Highlights from last con call:

Financial Performance

AUM: ₹2,54,470 crores (18.8% YoY growth)

Disbursements: ₹43,766 crores (15.8% YoY growth)

Net Interest Income (NII): ₹5,823 crores (14.3% YoY growth)

Net Interest Margin (NIM): 8.48% (vs. 8.99% in Q3 FY24)

Profit After Tax (PAT): ₹3,570 crores (96.3% YoY growth, includes ₹1,489 crores one-time gain from Shriram Housing Finance stake sale)

Excluding one-time gain: PAT at ₹2,080 crores (14.4% YoY growth)

Cost-to-Income Ratio: 28.6% (vs. 27.0% in Q3 FY24)

Gross Stage 3 Assets: 5.38% (vs. 5.66% in Q3 FY24)

Net Stage 3 Assets: 2.68% (vs. 2.72% in Q3 FY24)

Credit Cost: 1.85% (vs. 2.15% in Q3 FY24)