Shriram Fin Q4 Profit Jumps 40% Amidst West Asia Risks

Mumbai, Apr 24 (PTI) Non-banking lender Shriram Finance on Friday reported a 40 per cent jump in consolidated profit to Rs 3,021 crore during the March quarter, and flagged risks from the West Asia crisis and the likely monsoon deficit to its businesses.

The company is maintaining its 18 per cent assets under management (AUM) growth target for FY27 despite the headwinds that it will be facing, a top company official said.

"We had initially budgeted for the year to grow at 18 per cent. Now, looking at the crisis, we need to relook at it, but we have not revised it. So, we are still maintaining 18 per cent growth," Shriram Finance Executive Vice Chairman Umesh Revankar told PTI in an interview.

During the period under review, the shadow lender reported a 14.85 per cent rise in AUM to Rs 3.02 lakh crore from Rs 2.63 lakh crore in a year-ago period.

He said the company will revisit its growth projections after the first quarter results of the current financial year as there will be more clarity on fuel prices and rainfall trends.

The profit growth was led by improvement in margins, stable asset quality and lower operating expenses.


Revankar said the absence of one-off costs, including additional gratuity-related expenses incurred in the previous quarter, also supported profitability.

On margins, the company expects net interest margins (NIMs) to remain stable or improve slightly from the expansion to 8.61 per cent reported in Q4 as against 8.25 per cent in the year-ago period.

The margin expansion was supported by lower borrowing costs following recent capital infusion from Japan's MUFG and improved credit ratings, as per the company.

He added that borrowing requirements are likely to remain limited in the first half of the fiscal year due to the recent capital raise.

On April 8, Shriram Finance said that Japan's MUFG Bank acquired 20 per cent stake in the company for Rs 39,618 crore.

MUFG Bank has subscribed to 471,121,055 equity shares at an issue price of Rs 840.93 per share, with the total investment amounting to approximately Rs 39,618 crore in the largest-such commitment in the financial sector.

The company scrip closed 0.11 per cent higher at Rs 1,010.75 apiece on the BSE.