This article first appeared on GuruFocus .
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Revenue:Disbursement growth of 14.91% year on year, totaling INR50,952.30 crore in Q4 FY26.
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Assets Under Management (AUM):Grew by 14.85% year on year to INR3 lakh 2,273.75 crore as of March 31, 2026.
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Net Interest Income:Increased by 15.58% year on year to INR6,994.08 crore in Q4 FY26.
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Net Interest Margin:Stood at 8.61% in Q4 FY26, up from 8.25% in Q4 FY25.
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Profit After Tax (PAT):Increased by 40.86% year on year to INR3,013.57 crore in Q4 FY26.
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Earnings Per Share (EPS):INR16.02 in Q4 FY26, compared to INR11.38 in Q4 FY25.
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Asset Quality:Gross Stage 3 at 4.5% and Net Stage 3 at 2.33% in Q4 FY26.
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Credit Cost:1.68% on total assets for FY26.
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Cost-to-Income Ratio:Improved to 25.32% in Q4 FY26 from 27.65% in Q4 FY25.
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Cost of Liabilities:Decreased to 8.59% in Q4 FY26 from 8.69% in the previous quarter.
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Liquidity Coverage Ratio:323.17% in Q4 FY26.
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Capital Adequacy Ratio:20.4% post equity infusion, expected to reach 34%.
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Release Date: April 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Shriram Finance Ltd ( BOM:511218 ) reported a strong profit after tax growth of 40.86% in Q4 FY26 compared to Q4 FY25.
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The company's net interest income increased by 15.58% year on year, indicating strong revenue generation.
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Assets under management grew by 14.85% over Q4 FY25, showcasing robust asset growth.
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The company successfully completed a transformative milestone by completing a preferential allotment to MUFG Bank Limited, boosting capital adequacy.
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The cost-to-income ratio improved to 25.32% in Q4 FY26 from 27.65% in Q4 FY25, indicating better operational efficiency.
Negative Points
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India's GDP growth slowed to 7.8% in Q3 FY26, down from 8.4% in the previous quarter, which could impact future growth prospects.
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Retail inflation rose to 3.4% in March 2026, driven by higher food prices, potentially affecting consumer spending.
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The company's gross Stage 3 assets slightly increased to 4.5% in Q4 FY26 from 4.55% in Q4 FY25, indicating some asset quality concerns.
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The rural economy faces risks from potential monsoon shortfalls and elevated agro input costs, which could impact demand.
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The construction equipment segment recorded a degrowth of 16.02% in Q4 FY26, reflecting challenges in that sector.
Q & A Highlights
Q: Can you provide insights into the segment-wise growth and the outlook for FY27? A: Umesh Revankar, Executive Vice Chairman, explained that while sales numbers have grown significantly across various categories, the overall growth for FY27 is expected to be muted. However, the demand for used vehicles is likely to remain strong, and the company has projected an 18% AUM growth for FY27, driven by increased penetration and customer retention.
Q: What factors contributed to the decline in operating expenses this quarter? A: Sanjay Kumar, Investor Relations, noted that the decrease in operating expenses was due to a reduction in staff costs, lower branding and advertisement expenses, and a change in accounting estimates related to two-wheeler DSA payouts. The cost-to-income ratio improved due to these factors and strong net interest income.
Q: How is the company addressing the increase in gross Stage 3 assets and potential credit cost concerns? A: Umesh Revankar stated that fluctuations in cash flow among retail customers are common, and the company is monitoring the MSME segment closely. The company has increased its coverage slightly but does not foresee significant challenges unless fuel prices rise substantially, which would impact inflation and consumption.
Q: What is the impact of geopolitical tensions and potential fuel price increases on the company's operations? A: Umesh Revankar explained that transporters typically pass on fuel cost increases to customers, so their net earnings are not directly impacted. The company is monitoring the situation closely and will reassess its credit cost estimates after the first quarter, depending on the economic impact of geopolitical tensions and fuel prices.
Q: How does the company plan to leverage its recent capital infusion and credit rating upgrade? A: Parag Sharma, CFO, mentioned that the company has not borrowed much recently due to excess liquidity. The capital infusion and credit rating upgrade are expected to lower the cost of borrowing in the future. The company plans to test the market with its AAA rating and expects to see benefits in its cost of funds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
