Earnings Review
Healthy AUM growth, NII boost Shriram Finance's Q1 net profit
This story was originally published at 16:04 IST on 25 July 2025
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--Shriram Finance Apr-Jun net profit INR 21.56 bln
--Analysts saw Shriram Finance Apr-Jun net profit at INR 21.57 bln
--Shriram Finance Apr-Jun net profit INR 21.56 bln vs INR 19.81 bln year ago
--Shriram Finance Apr-Jun total income INR 115.42 bln vs INR 96.10 bln yr ago
--Shriram Finance Apr-Jun net interest income INR 60.26 bln, up 12.6% on yr
--Shriram Finance Apr-Jun NIM 8.11% vs 8.25% qtr ago, 8.79% year ago
--Shriram Finance liquidity coverage ratio 268.74% as on Jun 30
--Shriram Finance NPA provision coverage ratio 44.31% as on Jun 30
--Shriram Fin net NPA 2.57% on Jun 30 vs 2.64% qtr ago, 2.71% year ago
--Shriram Fin gross NPA 4.53% on Jun 30 vs 4.55% qtr ago, 5.39% year ago
--Shriram Finance AUM at INR 2.722 tln as on Jun 30, up 16.6% on year
--Shriram Finance capital adequacy ratio at 20.79% as on Jun 30
By Pratiksha
NEW DELHI – In line with the trend seen in the previous quarter, Shriram Finance Ltd.'s net profit for the June quarter rose year on year due to healthy growth in assets under management and increase in net interest income. However, the on-year rise in net profit was the slowest in six quarters.
As per analysts' expectations, the company posted a net profit of INR 21.56 billion for Apr-Jun, up almost 9% on year and flat on quarter. However, a sharp rise in finance cost capped the rise in bottom line. On Friday, shares of the non-banking financial company closed 2.8% lower at INR 615.85 on the National Stock Exchange.
The company's assets under management rose 16.6% on year to INR 2.72 trillion as of Jun. 30. Of the total assets under management, the shares of the commercial vehicle, passenger vehicle, and micro, small, and medium enterprise segments were 45.2%, 20.8%, and 14.3%, respectively, in the June quarter. The gold loan and personal loan segments made up 1.9% and 3.8%, respectively, of the total assets under management.
The commercial vehicle segment grew 12.3% on year to INR 1.23 trillion in Apr-Jun while the farm equipment segment rose 46.3% on year to INR 58.27 billion, posting the biggest growth in the AUM pack in the reporting quarter. The MSME segment reported an on-year growth of 34.8% to INR 388.24 billion.
The gold loans and construction equipment segment were the only sectors to report a year-on-year fall in the June quarter. Gold loans declined 15.8% on year to INR 51.54 billion and construction equipment sector declined 3% on year to INR 165.35 billion.
The Chennai-based company's total income rose over 20% on year to INR 115.42 billion during the June quarter, primarily due to a 20% on-year jump in interest income to INR 111.73 billion. In Apr-Jun, the company's net interest income - the difference between interest earned and expended - rose 13% on year to INR 60.26 billion. Analysts had expected net interest income to rise 12% on year to INR 58.60 billion for the reporting quarter.
The company's asset quality improved both sequentially and annually, with the gross non-performing asset ratio falling to 4.53% as of Jun. 30, from 4.55% as of Mar. 31 and 5.39% a year ago. The net non-performing asset ratio was 2.57% as of Jun. 30, down from 2.64% as of Mar. 31 and 2.71% a year ago. The non-performing asset provision coverage ratio rose to 44.31% as of Jun. 30, from 43.28% at the end of the previous quarter.
The company's net interest margin moderated to 8.11% in Apr-Jun from 8.25% a quarter ago and 8.79% a year ago. This was primarily due to the Reserve Bank of India's Monetary Policy Committee cutting the repo rate by 100 bps so far in 2025. Most brokerages had, however, expected the company's net interest margin to expand on quarter.
Shriram Finance's capital adequacy ratio was 20.79% as of Jun. 30, up from 20.66% at the end of the previous quarter. Its liquidity coverage ratio was 268.74% as of Jun. 30, against 286.73% a quarter ago. End
Edited by Ashish Shirke
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