Shriram Finance reported a strong Q2 FY26 performance, driven by growth in commercial vehicles and rural segments. Key highlights include a 10.24% increase in disbursements, a 15.74% rise in AUM, and an 11.77% growth in net interest income. The company anticipates continued growth, driven by government infrastructure spending and a favorable monsoon. Net interest margin for the full year is expected to be between 8.25% to 8.3%.
Financial Performance
Shriram Finance reported a robust performance for Q2 FY26, with several key metrics showing positive growth:
- Disbursements: Increased by 10.24% year-on-year, reaching ₹43,019.17 crore.
- Assets Under Management (AUM): Grew by 15.74% over Q2 FY25 and 3.3% sequentially, standing at ₹2,81,309.46 crore.
- Net Interest Income: Rose by 11.77% year-on-year to ₹6,266.84 crore.
- Profit After Tax (PAT): Increased by 11.39% over Q2 FY25 and 7.03% over Q1 FY26, registering at ₹2,307.18 crore.
- Earnings Per Share (EPS): Stood at ₹12.27.
Asset Quality
The company demonstrated improvement in asset quality:
- Gross Stage 3: Stood at 4.57%.
- Net Stage 3: Was at 2.49%.
Credit cost on total assets for Q2 FY’26 stood at 1.68%.
Business Segments Performance
Key segments contributed to the overall growth:
- Commercial Vehicle (CV) Sales: Increased by 8.27%, with M&HCV recording a growth of 6.16% and LCV growing by 9.54%.
- Tractors: Recorded a significant growth of 14.72%.
- Two-Wheelers: Recorded a growth of 7.39%.
Strategic Focus and Outlook
Shriram Finance is focused on:
- Retaining customers and supporting them through various financial solutions.
- Maintaining a stable net interest margin.
- Reducing borrowing costs through strategic liability management.
- Expanding reach in the MSME segment.
The company anticipates continued growth, driven by government infrastructure spending, a favorable monsoon, and steady GST collections. The net interest margin is expected to reach 8.5% by the end of Q4 FY26.
Liquidity and Borrowings
The company has reduced its overall debt from ₹2,42,911 crore in the June quarter to ₹2,34,000 crore in the September quarter. The incremental cost of funds is approximately 8.07% for the current quarter. The liquidity coverage ratio stands at 297%.
Source: BSE
