After a robust Q2 performance, the share price of Shriram Finance increased by 7% in early trading on Monday, October 28. On Friday, after market hours, the company released its profits.
The share price of Shriram Finance opened Monday at ₹3,173.45 on the BSE, 2.65% higher than the closing price of ₹3,091.40. After that, the price of Shriram Finance’s stock rose 7% to reach intraday highs of ₹3,309.05.
Shriram Finance Q2 Results
In comparison to the same period last year, when it was ₹4,818.18 crore, Shriram Finance’s net interest income (NII) for the second quarter ended September 30, 2024, climbed by 16.37% to ₹5,606.74 crore.
Compared to ₹1,750.84 crore during the same time last year, the profit after tax (PAT) climbed by 18.30% to ₹2,071.26 crore. On a year-over-year (YoY) basis, the basic earnings per share (EPS) climbed 18.04% to ₹55.09 from ₹46.67.
On September 30, 2024, total assets under management (AUM) was ₹243,042.55 crore, up 19.94% from September 30, 2023, when it was ₹202,640.96 crore, and June 30, 2024, when it was ₹233,443.63 crore.
Shriram Finance has positioned itself to benefit from its diverse AUM mix, better access to liabilities, and increased cross-selling prospects, according to analysts at Motilal Oswal Financial Services.
It further stated that the firm will be able to enhance its capital sufficiency and work cooperatively with credit rating agencies to strengthen its credit rating through the monetisation of its stake in Shriram Housing. The MOFSL reaffirmed its “Buy” recommendation for the company, citing a target price of ₹4,000.
According to Manish Chowdhury, Head of Research at StoxBox, Shriram Finance has shown strong financial results, as seen by an 18% yearly increase in net profit and growth in AUM. “Despite a minor rise in provisions, we saw a slight improvement in both the GNPA and NNPA ratios in the most recent quarter. But throughout this time, the company’s net interest margins (NIMs) were compressed,” he stated.
According to Chowdhury, Shriram Finance’s announcement of a dividend and a share split demonstrates confidence in its financial standing. Chowdhury expects NIM and profitability to rise in the future.
“Furthermore, the stability in new delinquency creation and write-offs, coupled with consistent reductions in Stage-3 and Stage-2 asset levels, indicates a stable credit cost environment. Given these factors, our outlook on SFL remains positive, particularly with the prospect of robust AUM growth,” he added.
Shriram Finance: Interim Dividend
A 220 per cent interim dividend of ₹22 per share was declared by the Shriram Finance Board, and the record date for eligibility is set for November 07, 2024.
Additionally, Shriram Finance announced that subject to the approval of company members via postal ballot, one (1) fully paid equity share with a face value of Rs. 10 (Rupees Ten Only) held by each member would be divided into five (2) fully paid equity shares with a face value of ₹2 (Rupees Two Only). The record date for the sub-division/split of equity shares has not yet been determined; it will be made public upon the approval of the company’s members.
