Shriram Finance Limited reported strong performance in its Q2 FY27 earnings call. The company highlighted a 59.37% year-on-year growth in profit after tax, reaching INR3,677.03 crore. Management discussed the economic outlook, disbursement growth of 25.71%, and asset quality indicators, noting seasonal impacts and prudent management of credit costs. The call also touched upon net interest margins, borrowing costs, and future growth strategies.
Shriram Finance Limited: Q2 FY27 Earnings Conference Call Summary
Financial Performance Highlights
During the Q2 FY27 earnings call, Shriram Finance Limited shared an optimistic outlook and detailed its operational performance. The company announced a significant 59.37% year-on-year growth in profit after tax for the quarter, with the figure standing at INR3,677.03 crore. This compares to INR2,307.18 crore in Q2 FY26. The net interest income also saw a substantial increase, growing by 38.2% year-on-year to INR8,661.04 crore.
The earnings per share (EPS) for the quarter was reported at INR15.63, an increase from INR12.27 in Q2 FY26. The net interest margin (NIM) for Q2 FY27 was 9.52%, up from 8.19% in the prior year’s second quarter. The board also declared an interim dividend of INR6.5 per share.
Operational Performance and Growth
Disbursements for Q2 FY27 aggregated to INR54,079.02 crore, marking a 25.71% year-on-year growth. Assets Under Management (AUM) grew by 16.96% over Q2 FY26 to INR3,29,021.72 crore. The company noted robust growth across various vehicle segments, including commercial vehicles (28.7%), passenger vehicles (30.7%), and two-wheelers (15.2%). Electric vehicle (EV) segment also showed strong expansion, with passenger EVs growing by 106%.
Asset Quality and Credit Cost
Regarding asset quality, gross Stage 3 loans stood at 4.65% and net Stage 3 at 2.31%. The company maintained its credit cost guidance at approximately 2% for the full year, with temporary fluctuations possibly increasing it by 30-40 basis points in specific geographies due to seasonal impacts and drought conditions. Management expressed confidence in managing these temporary impacts and indicated that the credit cost is expected to normalize.
Economic Environment and Outlook
The management provided insights into the broader economic landscape, mentioning India’s resilient GDP growth and the IMF’s upward revision of the growth forecast. However, they also acknowledged the impact of rising inflation, a weaker monsoon in certain regions, and geopolitical events. Despite these headwinds, Shriram Finance remains cautious but optimistic about its growth trajectory, particularly focusing on expanding its MSME and gold loan portfolios. The company anticipates a busy second half of the financial year and is confident in its performance.
Key Takeaways
- Profit After Tax Growth: 59.37% YoY to INR3,677.03 crore.
- Disbursement Growth: 25.71% YoY to INR54,079.02 crore.
- AUM Growth: 16.96% YoY to INR3,29,021.72 crore.
- Net Interest Margin (NIM): 9.52% in Q2 FY27.
- Credit Cost Guidance: Maintained at ~2% for the full year, with potential temporary increases.
- Interim Dividend: Declared INR6.5 per share.
Source: BSE
