Shriram Finance Q1 results: PAT up 9% at ₹2,156 cr on healthy loan growth

India's Shriram Finance posted a rise in first quarter profit on Friday, helped by healthy loan growth.

The non-banking finance company (NBFC) reported an 8.8% year-on-year rise in standalone profit at ₹2,156 crore ($249.01 million) for the quarter ended June 30.

However, this was slightly below the analysts' average estimate of ₹2,191 crore, according to data compiled by LSEG.

Analysts said that while the broader non-banking lending sector was hit by high funding costs, Shriram Finance saw loan growth across segments, with relatively stronger traction in small business and two-wheeler loan portfolios.

Commercial vehicle loans increased by 12.3 per cent, while loans to medium and small businesses grew by 35 per cent. Loans from the passenger vehicle and two-wheelers segments rose about 23 per cent each.

 

These four segments account for nearly 85 per cent of the company's total assets under management (AUM), which rose 16.6 per cent to ₹2.72 trillion in the quarter.

Shriram Finance's net interest income - the difference between interest earned on loans given out and paid on borrowings - rose 12.6 per cent to ₹6,026 crore, beating analysts' expectation of ₹5,941 crore.

Its gross stage 3 assets, or loans which have been overdue for more than 90 days, declined 1.7 per cent year-on-year.

Shriram Finance shares pared some losses to trade down 3 per cent after the results, having fallen 4.4 per cent earlier in the session.