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Informist, Saturday, Apr. 18, 2026

By Pratiksha

MUMBAI – Shriram Finance Ltd.'s net profit for the March quarter is seen rising sharply on year due to healthy growth in net interest income and assets under management, according to brokerages tracking the non-banking financial company. An increase in net interest margin is also expected to boost the company's bottom line, analysts said. 

The Chennai-based lender's net profit is expected to rise 28% on year to INR 27.43 billion in the March quarter, according to the average of the estimates from 11 brokerages. Sequentially, the net profit is expected to rise just 1%. 

Nirmal Bang Equities Ltd. has the lowest estimate for the company's net profit for the March quarter at INR 25.31 billion, while Equirius Securities Ltd. has the highest at INR 30.18 billion. The company will detail its March quarter earnings on Friday.

Brokerages see the company's assets under management rising 15-17% on year to about INR 3.01 trillion to INR 3.06 trillion at the end of March. This rise would be on top of the 15% on-year increase to INR 2.92 trillion at the end of December.

"(We) expect 16% YoY growth in AUM led by replacement demand. With access to long-term growth capital (recent infusion of INR 396.2 billion by MUFG Bank), SHFL (Shriram Finance) is guiding for a higher growth in FY27," Prabhudas Lilladher said in a pre-earnings report.

In December, Shriram Finance announced that Japan's MUFG Bank would invest over INR 396 billion in the company for 20% stake. Ever since, multiple credit rating agencies have upgraded the company's long-term credit rating. Fitch on Apr. 15 upgraded Shriram Finance's long-term currency rating to 'BBB-' from 'BB+' with a 'stable' outlook, citing the capital infusion by MUFG Bank. The rating agency said the fund infusion would likely strengthen Shriram Finance's capitalisation and increase funding access.

The company's net interest income – the difference between interest earned and expended - for Jan-Mar is expected to have risen 24% on year to INR 69.05 billion, according to the average of estimates from 11 brokerages. The company's net interest income had risen 16% on year to INR 67.64 billion in the December quarter.

Most brokerages expect the company's net interest margin to have expanded 25-60 basis points on year in the March quarter owing to a reduction in cost of funds after the 125 bps of rate cuts by the RBI's Monetary Policy Committee in 2025. The company's net interest margin was 8.58% in the December quarter. The recent spate of credit rating upgrades for the company is also expected to support a rise in margins by way of lower cost of borrowing, brokerages said.

"NIM is expected to improve for Shriram and Cholamandalam," YES Securities said in a pre-earnings report. "For the former, CoF (cost of funds) benefits would continue (despite rate hardening in funding markets) on the back of large equity capital infusion." However, net interest margin is expected to remain broadly stable sequentially, according to brokerages.

Some brokerages expect the non-bank financial company's provisions to fall on year in the March quarter, supporting the bottom line. Both Kotak Securities and Nuvama Wealth Management expect the company's provisions to fall almost 9.5% on year to INR 14.2 billion in Jan-Mar, while ICICI Securities sees it falling 11% on year to INR 13.88 billion. Shriram Finance's loan losses and provisions fell 1.2% on year to INR 13.10 billion in the December quarter.

Brokerages will watch out for the company's commentary on loan growth in the commercial vehicle segment and asset quality in the two-wheeler and passenger vehicle segments. Brokerage Prabhudas Lilladher has maintained a cautionary stance on the company's micro, small and medium enterprises and construction equipment portfolio.

Shares of the company have risen over 5% since it declared its earnings for the December quarter on Jan. 21. Shares of the company closed 1.4% higher at INR 1036.95 Friday on the National Stock Exchange. All 14 brokerages, whose reports on Shriram Finance are available with Informist, have a 'buy' rating on the company with an average target price of INR 1,059.

Following are the Jan-Mar earnings estimates for Shriram Finance from 11 brokerages in descending order of the estimate of net profit in INR billion:

End

Edited by Avishek Dutta

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