511218) (Q2 2027) Earnings Call Highlights: Profit Jumps 59% YoY as ...

Shriram Finance Ltd (BOM:511218) (Q2 2027) Earnings Call Highlights: Profit Jumps 59% YoY as …

This article first appeared on GuruFocus.

Disbursements: INR54,079.02 crore in Q2 FY27, up 25.71% YoY from INR43,019.17 crore.
AUM: INR329,002.72 crore as of September 30, 2026, up 16.96% YoY and 4.85% QoQ.
Net Interest Income: INR8,661.04 crore in Q2 FY27, up 38.2% YoY from INR6,266.84 crore.
Net Interest Margin: 9.52% in Q2 FY27 vs 8.19% in Q2 FY26 and 9.04% in Q1 FY27.
Profit After Tax: INR3,677.03 crore in Q2 FY27, up 59.37% YoY from INR2,307.18 crore; Q1 FY27 PAT was INR3,444.56 crore.
Earnings Per Share: INR15.63 in Q2 FY27 vs INR12.27 in Q2 FY26 and INR14.83 in Q1 FY27.
Asset Quality (Gross Stage 3): 4.65% in Q2 FY27 vs 4.57% in Q2 FY26 and 4.64% in Q1 FY27.
Asset Quality (Net Stage 3): 2.31% in Q2 FY27 vs 2.49% in Q2 FY26 and 2.33% in Q1 FY27.
Cost-to-Income Ratio: 22.52% in Q2 FY27 vs 27.76% in Q2 FY26 and 25.48% in Q1 FY27.
Dividend: Interim dividend of INR6.5 per share (325%); record date October 29, 2026.
Cost of Liabilities: 8.41%, down 15 bps QoQ and 18 bps from March; incremental cost of funds at 7.3% vs 7.7% in prior quarter.
Liquidity Coverage Ratio: 303% vs 262% in the previous quarter.
Leverage Ratio: 2.16x vs 2.14x in the previous quarter.
Capital Adequacy Ratio: 33.24% vs 34% in the previous quarter.

Release Date: October 23, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Disbursements grew 25.71% YoY to INR54,079 crore, with AUM up 16.96% YoY to INR329,003 crore.
Net interest income surged 38.2% YoY to INR8,661 crore, and PAT jumped 59.37% YoY to INR3,677 crore.
Net interest margin expanded to 9.52% from 8.19% YoY, driven by capital infusion and lower cost of funds.
Cost-to-income ratio improved to 22.52% from 27.76% YoY, reflecting better operating efficiency.
Asset quality remained stable with gross Stage 3 at 4.65% and net Stage 3 at 2.31%, while liquidity coverage ratio stood strong at 303%.

AUM growth guidance cut to 15-17% from 18% earlier, citing cautious stance due to West Asia crisis and below-normal monsoon.
Gross Stage 2 and Stage 3 assets increased in construction equipment, gold, and MSME segments, largely due to seasonal and drought-related stress.
NIM expected to moderate to around 9% in medium term and 8.5% in long term as excess capital gets utilized and yields compress from new vehicle lending.
Cost of funds may not reduce further if interest rates remain elevated, with incremental cost likely to rise to 8.30-8.35% from 8% if rate hikes continue.