Shriram Finance share price plummeted 8.5 per cent to hit an intraday low of ₹600 on the BSE on Monday despite posting strong numbers during the March 2025 quarter results.
The company posted a 10% year-on-year (YoY) increase in standalone net profit to ₹2,139 crore for the quarter ended March 2025, driven by robust disbursements and solid net interest income. However, credit costs saw a steep 18% quarter-on-quarter rise, reaching 2.4% of Assets Under Management (AUM).
Net interest income (NII) for the quarter increased by 13% to ₹6,051 crore, compared to ₹5,336 crore in the same period last year. Total income for Q4 came in at ₹11,460 crore, up from ₹9,498 crore a year ago. Revenue from operations grew 21% year-on-year to ₹11,454 crore, while fee and commission income more than doubled to ₹331 crore.
Despite higher costs, profit before tax increased to ₹12,606 crore, supported in part by a one-time gain of ₹1,657 crore from the sale of its stake in subsidiary Shriram Housing Finance (now known as Truhome Finance).
“Our strong performance this year reflects the strength of our lending model and disciplined risk management. We are focused on digital expansion and improving customer experience while maintaining our leadership in rural and semi-urban lending,” said Arul Chakravarthi, MD & CEO, Shriram Finance.
The company’s loan book grew to ₹2.45 lakh crore, rising from ₹2.08 lakh crore in FY24. Asset quality stayed steady, with the gross NPA at 4.55% and net NPA at 2.64%. The capital adequacy ratio was strong at 20.66%, significantly exceeding regulatory norms.
Should you buy, sell or hold Shriram Finance shares?
Brokerage firm Motilal Oswal has reiterated a ‘buy’ rating for Shriram Finance stock with a target price of ₹790.
“SHFL delivered a decent operational performance during the quarter, supported by healthy growth in AUM and disbursements. Although credit costs in the quarter were higher than guidance, the company does not foresee any further stress or deterioration in asset quality in FY26. Moreover, it anticipates an improvement in the overall credit environment, which is expected to sustain healthy AUM growth. NIMs are expected to revert to previous levels and further expand as excess liquidity on the balance sheet normalises,” the brokerage firm said in a note.
The brokerage firm further added, “The current valuation of ~1.7x FY27E P/BV is attractive for ~19% PAT CAGR over FY25-27E and RoA/RoE of ~3.3%/16.0% in FY27E. Reiterate BUY with a TP of INR790 (based on 2x FY27E BVPS).”
Meanwhile, Equirus Securities has downgraded the Shriram Finance stock to ‘reduce’ from ‘add’ with a target price of ₹620. “We expect SHFL to incrementally see a moderation in loan growth and ROA. With a sharp stock price rally since 3Q results, we assign REDUCE (from ADD earlier) with a Mar’26 TP of ₹620 at 1.8x (unchanged) on FY27 ABVP,” the firm said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
