Shriram Finance delivered impressive financial results with net profit growing 59.4% year-on-year in Q2FY27, significantly outpacing its larger rival Bajaj Finance. According to reports from The Financial Express, the company's standalone loan book expanded 17% y-o-y to ₹3.29 lakh crore during the quarter. The strong performance was driven by robust growth in high-margin segments, with commercial vehicle loans growing 19.4% y-o-y to ₹1.53 lakh crore and accounting for 46.5% of the total loan book. Gold loans surged 68.2% y-o-y to ₹8,974.2 crore, while passenger vehicle loans increased 20.1% y-o-y to ₹71,541.9 crore.
Despite strong quarterly results, Shriram Finance's stock fell 1.9% to ₹825 on Friday and is hovering above its 52-week low of ₹727.75 reached on October 31, 2025. As reported by The Financial Express, investors were disappointed with the company's cautious growth outlook shared in the post-earnings conference call. Senior management highlighted they expect loan growth of 15% to 17% going forward, which is considerably weaker than the second quarter of FY27. The management cited concerns about weak monsoon conditions and no signs of ending the Middle East crisis as factors influencing their cautious stance.
Shriram Finance's standalone net interest income grew 39.7% y-o-y to ₹8,415 crore, significantly outperforming Bajaj Finance's 24.9% growth to ₹12,150 crore. According to The Financial Express, this outperformance was driven by the company's large exposure to commercial vehicle loans and strong focus on higher-margin segments. Shriram Finance's net interest margin improved to 9.5% compared to 8.19% a year earlier, while Bajaj Finance's NIM was 8.19% in the same period. The company's return on equity stood at 16.4% on a standalone basis, while Bajaj Finance reported a consolidated return on equity of 20.6%.
Shriram Finance's net NPA ratio improved to 2.3% from 2.49% a year earlier, though impairment on financial instruments increased to ₹1,877.4 crore from ₹1,333.3 crore previously. As reported by The Financial Express, Bajaj Finance's net NPA ratio was 0.53% for the first half of FY27 compared to 0.77% a year earlier. The price-to-book value ratio stands at 1.7 times for Shriram Finance compared to Bajaj Finance's 5.3 times, representing a 68% discount to its larger rival. This valuation gap is significantly wider than the historical range of 1.1 times to 3.5 times for Shriram Finance over the past five years.
Looking ahead, Bajaj Finance has received board approval to raise up to ₹11,700 crore via equity shares to qualified institutional buyers and ₹5,800 crore via preferential issue to Bajaj Finserv. According to The Financial Express, Bajaj Finance has broadly pointed to 23% to 25% growth in its AUM on a consolidated basis going forward. The September 2026 quarter is typically a slack season for credit due to monsoon conditions and sluggish business activity. With the RBI raising policy rates in October 2026, investors will closely watch if both NBFCs can fully pass on the rise to borrowers and protect their net interest margins.
