Shriram Finance Q1 result: Net profit up 18% at Rs 1,981 cr on loan demand

Shriram Finance's earnings were boosted by higher commercial vehicle sales - which form its biggest financing segment, along with strength in farm equipment and small business credit segments

India's Shriram Finance reported a 18 per cent rise in first-quarter profit on Friday on strong demand in its key lending segments.

The company earned a standalone net profit of Rs 1,981 cr ($11.9 million) in the quarter ended June 30, compared to Rs 1,675 cr, a year ago.

Its shares, which were up around 4 per cent before the results, rose as much as 8.5 per cent.

Shriram Finance's earnings were boosted by higher commercial vehicle sales - which form its biggest financing segment - along with strength in its farm equipment and small business credit segments, industry data showed.

The non-banking financial company (NBFC) was formed in 2022 with the merger of Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital.

Shriram Finance's net interest income, the difference between interest earned and paid, rose 20.6 per cent to Rs 5,354 cr, beating analysts' estimate of Rs 5,291 cr as per LSEG data.

NBFCs accept fixed deposits and pay out interest on them, but not take demand deposits like traditional banks. Demand deposits allows withdrawals anytime, while fixed deposits have a lock-in period.

Its assets under management (AUM) rose nearly 21 per cent to Rs 2.33 trn as of end-June from a year ago.

Commercial Vehicle loans, which accounts for about 50 per cent of its total AUM, grew 14 per cent to Rs 1.10 trn, while loans to medium and small industries grew nearly 44 per cent.