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Shriram Finance Q1 net up 27%; targets Rs 2 trillion AUM by next quarter

Consolidated net interest income for the first quarter ended June 30 this year increased by 13.16 per cent and stood at Rs 4,576.6 crore as against Rs 4,044.42 crore

Shriram Finance

Shriram Finance

Shine Jacob Chennai

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Shriram Finance Ltd, the largest retail NBFC in India, has posted a 27 per cent rise in consolidated net profit during the first quarter of the financial year 2023-24 to Rs 1,712.2 crore as against Rs 1,351.6 crore recorded in the same period of the previous year, mainly due to rise in business volume.

During the period under review, the company’s total income was seen at Rs 8,292.5 crore, up 14 per cent from Rs 7,138.3 crore during the Q1 of FY23. “The rise in profit was mainly due to the rise in business volume. Our assets under management (AUM) went up by 18 per cent. The net interest margin would have been better but there was a slight increase in interest cost. Normally, the first quarter is a difficult quarter and considering that, overall the company has done well,” said Umesh Revankar, Executive Vice Chairman of Shriram Finance.

In the first quarter of the current financial year, the non-banking finance company’s total AUM stood at Rs 1.93 trillion, compared to Rs 1.63 trillion during the same period last financial year.  Revankar added that the company will be touching Rs 2 trillion in terms of AUM by the next quarter. “If you look at the numbers last quarter, we added around Rs 8,000 crore in terms of AUM. In same run rate, we will be able to touch Rs 2 trillion by the next quarter,” Revankar added.

Consolidated net interest income for the first quarter ended June 30 this year increased by 13.16 per cent and stood at Rs 4,576.6 crore as against Rs 4,044.42 crore during the April to June quarter of 2022-23.

Its net interest margin (NIM) on the AUM stood at 8.32 per cent during the first quarter of the year under review as against 8.12 per cent during the Q1 of 2022-23. In its presentation, the company indicated that during the first quarter of 2022-23, the figures include the effect of merger of transferor companies Shriram City Union Finance and Shriram Capital.

Its gross non-performing assets (NPAs) dipped to 6.03 per cent from 6.27 per cent a year ago. Its net NPA also declined to 2.96 per cent from 3.32 per cent at the end of June 2023. The NBFC’s capital adequacy stood at 22.4 per cent during the quarter as against 23.13 per cent in Q1 FY23.

Consolidated EPS (basic) increased by 26.12 per cent and stands at Rs 45.53 as compared to Rs 36.10 recorded in the same period of the previous year. The company had given a guidance of 15 per cent growth in AUM during the current financial year, Revankar said that the company will maintain this rate. “Third and fourth quarters are normally large quarters. Our 15 per cent guidance will remain but definitely we will work for more,” he said.  

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First Published: Jul 27 2023 | 7:46 PM IST

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