Shriram Finance Ltd.’s standalone internet revenue rose 9.9% year-on-year to Rs 2,139.4 crore for the quarter ended March, consistent with Bloomberg estimates of Rs 2,137.5 crore. Nevertheless, brokerages flagged considerations over internet curiosity margin stress, larger credit score prices, and a pointy enhance in gross stage-2 loans in the course of the quarter.
Following the outcomes, Macquarie and CLSA raised their goal costs, whereas HSBC lower its goal value.
The corporate’s NIMs have been impacted by the next liquidity buffer, with six months’ price of liquidity maintained on the stability sheet in comparison with the same old three months. Administration expects this to normalise over the subsequent two quarters. Credit score prices rose attributable to a 5.3% write-off of loans. Revenue after tax was impacted by decrease NIMs and better credit score prices, though this was partially offset by decrease taxes.
Shriram Finance This autumn Highlights (Standalone, YoY)
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Curiosity earnings up 19% to Rs 10,790 crore versus Rs 9,077 crore.
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Curiosity expense up 31% to Rs 5,224 crore versus Rs 3,988 crore.
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Internet curiosity earnings up 9% to Rs 5,566 crore versus Rs 5,089 crore.
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Working revenue up 11% to Rs 4,335 crore versus Rs 3,906 crore.
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Provisions up 24% to Rs 1,563 crore versus Rs 1,261 crore.
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Revenue after tax up 7% to Rs 2,144 crore versus Rs 2,009 crore.
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Return on belongings at 2.87% versus 2.88% (QoQ).
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Gross NPA at 4.55% versus 5.38% (QoQ).
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Internet NPA at 2.64% versus 2.68% (QoQ).
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Internet Curiosity Margin at 8.25% versus 8.48% (QoQ).
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Capital adequacy at 20.66% versus 21% (QoQ).
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Property Underneath Administration up 17% to Rs 2.63 lakh crore versus Rs 2.24 lakh crore.
Macquarie | Goal Value: Rs 800 | Ranking: Outperform
Macquarie maintained an ‘outperform’ ranking, noting that the revenue miss was pushed by decrease NIMs and better credit score prices, partially offset by decrease taxes. The rise in credit score prices was attributed to larger Stage-2 flows, notably within the passenger automobile, business automobile, MSME and two-wheeler segments.
Administration expects the stress to be transitory and is concentrating on credit score prices of two.2% for the monetary 12 months 2025. Macquarie additionally highlighted that larger liquidity ranges proceed to tug on NIMs and flagged draw back dangers to NIM and return on belongings for the monetary 12 months 2026.
CLSA | Goal Value: Rs 735 | Ranking: Outperform
CLSA maintained its ‘outperform’ ranking and raised the goal value to Rs 735 from Rs 670. It stated earnings have been 5% beneath its estimates attributable to decrease NIMs, which have been impacted by larger liquidity on the stability sheet.
The brokerage famous wholesome development momentum, led by business automobile, gold and private mortgage segments, though it flagged some moderation in mortgage development. CLSA expects 15% mortgage development subsequent 12 months, secure asset high quality, and a few enchancment in NIMs. It stored its revenue after tax estimates for monetary 12 months 2026 and 2027 largely unchanged.
HSBC | Goal Value: Rs 740 | Ranking: Purchase
HSBC maintained a ‘purchase’ ranking however lower the goal value to Rs 740 from Rs 810. It stated the rise in NIM stress, credit score prices and Stage-2 loans in the course of the quarter have been sudden. The brokerage expects near-term earnings stress however stated profitability stays wholesome over a two-year compounded annual development price foundation. It lower its earnings per share estimates by 4–6% for monetary 12 months 2026 and 2027.
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