Shriram Finance Q4 Results: Profit Rises 10% YoY, Declares ₹3 Dividend
Introduction
Shriram Finance, one of India’s leading NBFCs, reported a 10% year-on-year (YoY) rise in standalone net profit for Q4 FY24, reaching ₹2,139 crore. The company also announced a dividend of ₹3 per share, reinforcing investor confidence.
This earnings report highlights Shriram Finance’s resilience in a competitive lending market, driven by strong AUM growth and improved asset quality. Below, we break down the key takeaways, financial performance, and market reactions.
1. Key Financial Highlights
Standalone Q4 FY24 Results
| Metric | Q4 FY24 | Q4 FY23 | Change (YoY) |
|---|---|---|---|
| Net Profit | ₹2,139 Cr | ₹1,939 Cr | +10% |
| Net Interest Income (NII) | ₹5,120 Cr | ₹4,650 Cr | +10.1% |
| Assets Under Management (AUM) | ₹2.19 Lakh Cr | ₹1.96 Lakh Cr | +11.7% |
| Gross NPA (%) | 5.45% | 6.10% | -65 bps |
Dividend Announcement
- Final Dividend: ₹3 per share (subject to shareholder approval).
- Record Date: To be announced.
2. What Drove Shriram Finance’s Growth?
A. Strong AUM Expansion
- The company’s AUM grew by 11.7% YoY, driven by:
- Retail lending focus (commercial vehicles, SMEs, gold loans).
- Geographical expansion in Tier 2/3 cities.
B. Improved Asset Quality
- Gross NPA declined to 5.45% (from 6.10% YoY).
- Provision coverage ratio (PCR) at 65%, indicating stronger risk buffers.
C. Cost Efficiency & Digital Push
- Reduced cost-to-income ratio through automation.
- Digital loan disbursals up 30% YoY via Shriram One app.
3. Market Reaction & Analyst Views
Stock Performance Post-Results
- Share price rose 2.3% intraday post-earnings.
- Brokerage Ratings:
- Motilal Oswal: “Buy” (Target: ₹2,600).
- ICICI Securities: “Hold” (Target: ₹2,300).
Key Concerns
- Rising competition from banks & fintechs in CV/SME lending.
- RBI’s tighter NBFC regulations may impact margins.
4. Future Outlook & Strategic Plans
A. Growth Strategies for FY25
- Expand secured loan portfolio (gold loans, LAP).
- Partnerships with fintechs for digital distribution.
B. Risks to Monitor
- Rising borrowing costs due to RBI rate hikes.
- Asset quality slippages in unsecured loans.
Conclusion: Should Investors Hold or Exit?
Shriram Finance’s steady profitability, dividend payout, and improving NPAs make it a decent pick for long-term investors. However, rising competition and regulatory risks warrant caution.
Actionable Takeaway:
- Short-term traders may book profits near ₹2,500.
- Long-term investors can hold with a 3–5-year horizon.
