Shriram Finance's Financial Surge Amidst Mixed Market Signals

Shriram Finance reported a 9.95% rise in Q1 net profit to Rs 2,139 crore. FY25 saw a 35% profit increase to Rs 9,761 crore. NIM compressed to 8.25% with AUM growth boosting the net interest income. Shriram plans a 15% AUM rise amidst flat urban credit but encouraging rural prospects.

Shriram Finance, a major non-bank lender, has reported a 9.95% increase in its net profit for the January-March quarter, totaling Rs 2,139 crore compared to the same period last year. The company also posted a remarkable full-year profit rise of over 35% to Rs 9,761 crore for FY25, up from Rs 7,190 crore.

Core net interest income surged by 13.40% to Rs 6,051 crore, driven by a robust 17% growth in assets under management. However, there was a slight compression in the net interest margin, down to 8.25% from 9.05% year-on-year, influenced by excess liquidity and rising credit costs.

Shriram Finance's Executive Vice Chairman, Umesh Revankar, expressed optimism for an 8.5% NIM in FY26 and projected a 15% growth in AUM. Despite softness in urban credit pickup, strong rural prospects buoy the company's outlook. The personal loan segment grew by 11% in Q4, while the gold loan sector faced contraction amid elevated redemptions.

(With inputs from agencies.)