BUSINESS
Shriram Finance has posted an 18% rise in its first-quarter net profit to ₹1,981 crore, led by a strong growth in interest income. The Shriram Group company had reported a net profit of ₹1,675 crore for the corresponding quarter of the previous fiscal. Total income of the lender stood at ₹9,610 crore in the first quarter, up by 20% from the year-ago period. Net interest income grew 21% to ₹5,354 crore, compared with ₹4,439 crore in the same period last year. The results met the mean estimates of Bloomberg, which pegged ₹2,000 crore in profit and ₹5,000 crore in net revenue for the quarter under review. Total disbursements grew 24% year-on-year to ₹37,709 crore in Q1FY25, enabling the company to close total assets at ₹2.33 trillion as of June 2024. Of total assets, commercial vehicle advances accounted for the largest share at ₹1.09 trillion (47%), followed by passenger vehicles (20%) and MSME advances (12%). “OEM sales in Q1FY25 have been reasonably good. Commercial vehicle sales grew at 3.5% to 224,000 units, of which the MHCV segment grew by 9.7% to 85,421 units,” Umesh G Revankar, executive vice chairman, Shriram Finance , said in the earnings call. He added that ₹11 trillion of capex announced in the Budget, infrastructure development for eastern parts, additional financial support for development of capital for Andhra Pradesh and interest-free loans to states will augur well for the transportation, manufacturing and MSME businesses. YS Chakravarti, managing director and CEO, said the cost of funds remains stable at the current level of 8%. The company has a well-diversified range of borrowing sources. It plans to keep utilising retail deposits and securitization, which is one of the most cost-effective sources. Additionally, the company has a significant offshore borrowing programme which it will continue to use as opportunities arise. Revankar said the AUM growth rate will be maintained at 15%, and there will be no significant change in the portfolio mix. The truck business is expected to grow by 12%, the MSME book by 20% and two-wheeler loans by 15-18%. None
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