This article first appeared on GuruFocus .
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Disbursement Growth:19.51% YoY, reaching INR49,974.49 crore in Q1 FY27.
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Assets Under Management (AUM):Grew by 15.6% YoY to INR313,798.39 crore.
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Net Interest Income:Increased by 33.67% YoY to INR8,055.70 crore.
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Profit After Tax:Rose by 59.79% to INR3,444.56 crore.
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Net Interest Margin:Improved to 9.04% from 8.11% YoY.
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Earnings Per Share (EPS):INR14.83, up from INR11.46 YoY.
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Gross Stage 3 Assets:4.64% in Q1 FY27.
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Net Stage 3 Assets:2.33% in Q1 FY27.
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Credit Cost to Total Asset:1.66% in Q1 FY27.
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Cost-to-Income Ratio:Reduced to 25.48% from 29.29% YoY.
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Cost of Liability:Decreased to 8.56% from 8.59%.
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Liquidity Coverage Ratio:262.54%.
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Leverage Ratio:Reduced to 2.14x from 3.82x.
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Capital Adequacy Ratio:34.17%.
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Warning! GuruFocus has detected 6 Warning Signs with BOM:511218.
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Release Date: July 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 disbursement growth of 19.51% year-over-year, reaching INR49,974.49 crore in Q1 FY27.
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The company's asset under management grew by 15.6% over the previous year, indicating robust business expansion.
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Net interest income saw a significant increase of 33.67% year-over-year, reflecting improved profitability.
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Profit after tax surged by 59.79% to INR3,444.56 crore, showcasing strong financial performance.
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The company's liquidity coverage ratio was well-maintained at 262.54%, ensuring financial stability and readiness for future liabilities.
Negative Points
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India's economic growth forecast for FY27 has been lowered to 6.6% due to concerns about global conflicts, energy prices, and weather conditions.
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Retail inflation in India increased to 4.38% in June, driven by higher fuel and food prices, which could impact consumer spending.
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The rural economy faces challenges from geopolitical tensions and uneven rainfall, potentially affecting agricultural output and rural income.
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Gross Stage 3 assets increased slightly to 4.64%, indicating some pressure on asset quality.
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The company's cost of liability remains relatively high at 8.56%, which could impact future profitability if not managed effectively.
Q & A Highlights
Q: How is Shriram Finance planning to increase its share of new retail financing, and what are the expected returns on this segment? A: Sri. Umesh Revankar, Executive Vice Chairman, explained that the company is focusing on existing customers upgrading to new vehicles and reaching out to previous customers. Currently, 16% of disbursements are for new vehicles, and this is expected to increase. The profitability will remain stable as reduced borrowing costs are passed on to customers, maintaining long-term margins of 8.5%.
Q: What is the outlook for growth in the current fiscal year, considering the recent performance? A: Sri. Umesh Revankar stated that while they are cautious due to monsoon deficits, they are confident of achieving more than 15% growth in the next quarter. The full-year guidance remains at 18%, subject to revision after the second quarter.
Q: How is the asset quality, particularly in the MSME and gold loan segments? A: Sri. Umesh Revankar noted that the gold portfolio is growing rapidly, with plans to double in the next three years. The MSME segment is expected to grow as the company expands its branch network. There are no current concerns about asset quality in these segments.
Q: What is the company's strategy regarding liquidity and borrowing? A: Parag Sharma, CEO, mentioned that the company has achieved its liability repayment targets and will focus on business growth. They maintain liquidity for three months of future liabilities, and any surplus will be used for higher disbursements. Fresh borrowing will be considered towards the end of the quarter.
Q: How does Shriram Finance view the impact of geopolitical tensions and weather conditions on its business? A: Sri. Umesh Revankar acknowledged challenges from the West Asia crisis and uneven rainfall but expressed confidence in the company's ability to manage these risks. The economy is expected to grow steadily, and the company is prepared to adapt to changing conditions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
