Shriram Fin Q1 net jumps 60 pc to Rs 3,453 cr

Mumbai, Jul 24 (PTI) Non-bank lender Shriram Finance on Friday reported a 60 per cent jump in net profit to Rs 3,453 crore in the April-June quarter, driven by a healthy jump in core income.

Its executive vice chairman Umesh Revankar attributed the rise to a 33.67 per cent jump in core net interest income at Rs 8,056 crore, and the expansion in net interest margin to 9.04 per cent from 8.11 per cent in the year-ago period also helped.

He said Japan’s MUFG buying a 20 per cent stake for USD 4.4 billion helped in the NIM expansion as there was a huge quantum of capital and the cost of funds came down as its ratings improved. The lender is aiming to maintain the NIMs at around the 9 per cent level in the short term, he added.

Overall assets under

management grew by over 15 per cent on-year to June 30, and the disbursements were up by over 19 per cent, Revankar said, adding that the company is maintaining its 18 per cent AUM growth target for FY27.

The other income grew 44 per cent to Rs 1,105 crore during the quarter.

All the loan segments delivered handsome growth except construction equipment finance, which saw a de-growth of 25 per cent, and loans to micro, small and medium enterprises, which grew by a soft 8 per cent.

From an asset quality perspective, the proportion of gross stage-3 advances which are unpaid for over 90 days increased to 4.64 per cent at the end of the quarter from 4.58 per cent in the quarter-ago period ending March.

Revankar said collections are holding up well so far, but there may be some challenges to the rural economy in the second quarter because central India has received low rainfall, which may affect the transport- and farm-equipment-focused financier.

Specifically, he mentioned pulses and oilseed farmers as among the more impacted, saying these crops depend on the annual summer rainfall. PTI AA MR