Shriram Finance Q1 Results: Core income, profit beat expectations; Asset quality sluggish

Mumbai-based non-bank lender Shriram Finance Ltd. reported its June quarter results on Friday, July 24, that were better than expectations on the core income and the profitability front. The stock gained as much as 2% after the results announcement.The company’s net profit grew by 60% from last year to ₹3,447 crore. A CNBC-TV18 poll was working with a figure of ₹3,065 crore.

Net Interest Income (NII) or core income earned by Shriram Finance saw a growth of 33.6% from last year to ₹7,712 crore. Core income in the base quarter stood at ₹5,773 crore. The figure is also higher than the CNBC-TV18 poll estimate of ₹7,375 crore.
Gross NPA or Gross Stage 3 assets saw marginal deterioration during the quarter, coming in at 4.64% compared to 4.58% during the March quarter. Net NPA figure remained unchanged at 2.33% on a sequential basis.Assets Under Management (AUM) at the end of the June quarter stood at ₹3.13 lakh crore, compared to ₹2.7 lakh crore in June last year, indicating a growth rate of 15.3%.

Loan losses and provisions during the quarter stood at ₹1,463 crore, compared to ₹1,409 crore in March.

Shriram Finance’s Return on Assets (RoA) stood at 3.93% from 2.76% last year, while Return on Equity narrowed both year-on-year and on a sequential basis to 12.76% from 18.73% last quarter and 14.69% in the base quarter.

Shares of Shriram Finance, after making an intraday high of ₹1,051 after the results announcement, gave up all of those gains, currently trading 0.3% higher at ₹1,029.7. The stock has been flat on a year-to-date basis.