Non-banking finance company (NBFC) Shriram Finance on Friday reported 18 per cent year-on-year (y-o-y) rise in its net profit for the quarter ended September at ₹ 2,071 crore, led by strong core income growth.
The vehicle finance focused NBFC also announced a 1-to-5 stock split, along with a dividend of ₹ 22 per share today.
Shriram Finance’s net interest income (NII) grew 16 per cent y-o-y to ₹ 5,607 crore in Q2FY25, while net interest margin (NIM) moderated by 5 basis points (bps) sequentially to 8.74 per cent. Its total assets under management grew 20 per cent to ₹ 2.43 lakh crore.
Guidance for H2FY25
Speaking to businessline, Shriram Finance’s Executive Vice-Chairman Umesh Revankar acknowledged that there is a slowdown in vehicle sales in pre-festival season as compared to last fiscal, but affirmed that overall AUM will continue to grow in similar 20 per cent range in H2FY25.
“This festival season, sales are not as buoyant as last year. A slow pickup is there. But this doesn’t mean there will be flat growth, there will be growth, maybe a little lower than anticipated. Overall environment is positive and I expect higher growth in rural areas due to higher income led by better MSP (minimum support price) and higher output.” Urban consumption may be slow on account of higher inflation, he said.
The NBFC, he said, is being cautious in growing in certain Eastern parts of country, where economic activity is slower and there is lower vehicle demand. Overall, the NBFC is targetting close to 5 per cent gross non-performing asset (GNPA) ratio and 2.4 per cent net NPA (NNPA) ratio by FY25 end, as against 5.32 per cent GNPA and 2.64 per cent NNPA in Q2FY25.
Further, Revankar said the NBFC is in process to seek the Reserve Bank of India’s (RBI) approval for raising $750 million via foreign debt.
| Parameter | Q2FY25 (in Rs crore) | Change in %, y-o-y |
|---|---|---|
| Assets under management | 2.43 lakh crore | 20 |
| Net interest income | 5,607 | 16 |
| Net stage 3 (in %) | 2.64 | -16 basis points |
| Net interest margin (in %) | 8.74 | -19 basis points |
| PAT | 2,071 | 18 |
