Earnings Outlook
Shriram Fin's Jul-Sept PAT seen up 19% on robust AUM growth
This story was originally published at 17:43 IST on 18 October 2024
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By Pratiksha
NEW DELHI – Shriram Finance Ltd's net profit for Jul-Sept is seen rising 19.0% on year to INR 20.83 billion, according to the average of estimates from eight brokerages, with robust growth in assets under management expected to drive the rise in the bottom line. The Chennai-based non-banking finance company, which will release its Jul-Sept financial results on Oct. 25, posted a net profit of INR 19.81 billion for Apr-Jun.
"We expect disbursement growth of 5.5% quarter-on-quarter, 15% year-on-year, led by strong growth in the non-vehicle segment, resulting in AUM (assets under management) growth of 4.1% quarter-on-quarter, 20% year-on-year," Emkay Global Financial Services said in a pre-earnings report. The estimates for Shriram Finance's quarterly net profit ranged from INR 20.25 billion to INR 21.71 billion.
As of Jun. 30, the lender's assets under management were up 20.8% on year at INR 2.33 trillion. According to IDBI Capital Market Services, assets under management growth is expected to remain high at 19.8% at the end of September, with advances seen growing nearly 20%.
Net interest income is expected to rise 21.0% on year to INR 55.58 billion for the reporting quarter, according to the average of the eight brokerages' estimates. In Apr-Jun, it was INR 52.34 billion.
"Core NIM (net interest margin) will likely compress 8 basis points quarter-on-quarter to 10.5%, driven by a rise in cost of borrowings," Kotak Institutional Equities said. The company's net interest margin was 8.79% in Apr-Jun. Analysts will also eye Shriram Finance's commentary on sustainable growth in assets under management, the asset quality, and any updates on new segments of the business. On Friday, shares of Shriram Finance ended 2.6% higher at INR 3,344.65 on the National Stock Exchange.
Following are the Jul-Sept earnings estimates of Shriram Finance based on reports compiled by Informist from eight brokerage houses:
| BROKERAGE | NET INTEREST INCOME (in INR million) | NET PROFIT (in INR million) |
| Antique Stock Broking Ltd. | 57,018.00 | 21,077.00 |
| Centrum Broking Ltd. | 56,149.00 | 21,705.00 |
| Elara Securities (India) Pvt Ltd. | 56,766.00 | 20,822.00 |
| Emkay Global Financial Services Ltd. | 54,709.00 | 20,520.00 |
| IDBI Capital Market Services Ltd. | 54,087.00 | 20,246.00 |
| Kotak Institutional Equities | 57,748.00 | 20,672.00 |
| Motilal Oswal Financial Services Ltd. | 54,818.00 | 20,605.00 |
| Nirmal Bang Equities Pvt Ltd. | 53,344.00 | 21,011.00 |
| Average | 55,579.88 | 20,832.25 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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