Shriram Finance Ltd delivered exceptional fourth quarter results with standalone net profit jumping 41% year-on-year to ₹3,014 crore in Q4FY26. According to reports from The Hindu BusinessLine and CNBC TV18, this represents one of the company's best quarterly financial performances in recent times. The non-banking finance company's net profit in the corresponding quarter of the previous year stood at ₹2,139 crore, highlighting the significant improvement in profitability. The company also demonstrated strong sequential growth with 19.5% quarter-on-quarter increase from ₹2,521.67 crore in Q3FY26. However, shares of Shriram Finance declined over 4% on Monday despite the strong results, with the stock having declined over 6% in one week but gained over 8% in one month. As reported by The Hindu BusinessLine, the share price decline despite a sharp rise in fourth quarter earnings highlights investor concerns around asset quality and margin trends.
Revenue from operations showed robust growth, reaching ₹12,508.72 crore in Q4FY26 compared to ₹12,165.75 crore in Q3 and ₹11,454.23 crore in the year-ago period. As reported by The Hindu BusinessLine, the company's profit before tax increased significantly to ₹3,915.31 crore from ₹3,360.20 crore in Q3 and ₹2,771.98 crore in Q4FY25. Sequential growth remained robust, driven by lower expenses and improved operating leverage, with total expenses declining to ₹8,612.60 crore from ₹8,831.38 crore in Q3. Earnings per share rose to ₹16.02 from ₹13.40 in Q3 and ₹11.38 in the corresponding quarter last year. According to CNBC TV18, net interest income rose 21% year-on-year to ₹6,751 crore, broadly in line with estimates. The board has recommended a final dividend of ₹6 per share for the quarter.
The company's assets under management demonstrated robust growth, increasing 15% year-on-year to ₹3,02,274 crore, as reported by The Hindu BusinessLine. According to CNBC TV18, AUM stood at ₹3.02 lakh crore, growing 14.85% YoY and 3.62% QoQ, reflecting steady business expansion. Growth was broad-based across segments with commercial vehicles and passenger vehicles growing around 19% YoY each, while gold loans saw strong traction with nearly 37% growth. However, the construction equipment segment continued to be a drag, declining sharply both on a yearly and sequential basis. As reported by CNBC TV18, MSME lending remained relatively moderate, while the provision coverage ratio improved to 50.34%, offering comfort despite elevated GNPA levels. Capital adequacy remained healthy at 20.40%, with liquidity staying strong at a liquidity coverage ratio of over 323%.
Net interest income showed strong growth of 16% year-on-year to ₹6,994 crore, compared to ₹6,051 crore in the year-ago quarter. According to Mint, net interest income increased by 21% year-on-year to ₹6,751 crore in Q4FY26. The company's net interest margin improved to 8.61% from 8.25% a year ago, indicating better pricing and asset quality. The cost-to-income ratio also declined to 25.32% from 27.65%, reflecting operational efficiency improvements. Finance costs stood at ₹5,335.76 crore, while impairment on financial instruments remained elevated at ₹1,409.73 crore during the quarter. As reported by CNBC TV18, margins are expected to remain stable at around 8.5% in FY27, with limited scope for expansion as the company plans to pass on the benefit of lower cost of funds. Operating expenses declined in the quarter, aided by lower discretionary spending and absence of one-offs, with FY27 opex growth expected to remain in line with business growth.
Asset quality remained largely stable with gross non-performing assets (GNPA) at 4.58% compared to 4.54% in the previous quarter, while net non-performing assets (NNPA) improved to 2.33% from 2.38% sequentially, as reported by CNBC TV18. For FY27, Shriram Finance management has guided for AUM growth of around 18%, with stronger momentum expected in passenger vehicles and gold loans, while MSME growth is likely to remain measured. As reported by CNBC TV18, Managing Director Umesh Revankar said gradual price increases are preferable, as sharp hikes could impact demand, adding that MSME disbursements have been moderated with a cautious approach. He also noted that as long as GDP growth remains above 6.5%, the overall impact on the business should be manageable. The company expects stability in asset quality in the near term, though it remains watchful of risks from fuel prices, inflation, and borrower affordability. However, recent market pressure has intensified with shares declining 4% on Monday amid concerns about the MSME segment performance.
