Shriram Finance PAT up 2.3%, AUM growth strong but higher opex weighs

Shriram Finance’s net profit for Q3 FY24 rose 2.33 per cent y-o-y and 3.85 per cent q-o-q to ₹1,818 crore. On-year profitability was muted largely owing to the three-way merger of Shriram City Union Finance and Shriram Capital with Shriram Transport Finance in December 2022.

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Net Interest Income (NII) was up 15.04 per cent y-o-y and 5.72 per cent q-o-q at ₹5,094 crore. Other income was up 101.6 per cent on year but fell 0.27 per cent on quarter to ₹823 crore.

Operating expenses rose 27.4 per cent y-o-y and 4.7 per cent q-o-q to ₹14,869 crore, weighing on the bottomline. Staff costs were up 26.7 per cent on year and other operating expenses by 28 per cent.

Assets under management increased 20.7 per cent y-o-y and 5.7 per cent q-o-q to ₹2.1-lakh crore as of December 2023. The CV portfolio rose 13 per cent yoy and 4 per cent qoq to ₹1-lakh crore.

Passenger vehicle (PV) portfolio was up 31 per cent on year, MSME up 30 per cent, gold loans by 33 per cent and personal loans by 65 per cent. Two-wheeler loans grew by 21 per cent and construction equipment (CE) loans by 17 per cent.

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The gross stage 3 asset ratio improved to 5.66 per cent from 5.79 per cent a quarter ago and 6.29 per cent a year ago. The net stage 3 asset ratio at 2.72 per cent was also better than 2.80 per cent in the previous quarter and 3.20 per cent in the previous year.

On a consolidated basis, which includes the earnings of subsidiaries Shriram Housing Finance and Shriram Automall India, the NBFC’s profit after tax rose 4 per cent y-o-y and 4.6 per cent q-o-q to ₹1,874 crore. Consolidated NII increased by 16.93 per cent on year to ₹5,275 crore.