Shares of leading vehicle finance player Shriram Finance tumbled over 8 percent on April 28 after the after the March quarter results failed to meet Street expectations. The AUM growth has come in lowest in eight quarters on a QoQ basis, with a sharp fall in gold loan AUM.
The shares of the company were trading at Rs 599 apiece, the lowest level seen by the stock in the past 12 trading sessions.
The NBFC reported a standalone net profit of Rs 2,139.39 crore during the reported quarter, marking a 10 percent rise from the Rs 1,945.87 crore net profit reported in Q4 FY24. This however failed to meet several analysts' estimates. Kotak Institutional Equities had estimated the company's net profit at Rs 2,202 crore, while Axis Securities had predicted the net profit to rise to Rs 2,198 crore. JM Financial had meanwhile estimated the company's net profit at Rs 2,175 crore.
Shriram Finance's net interest income (NII) for the reported quarter grew over 13 percent to Rs 6,051.19 crore, while earning per share (basic) increased 9.85 percent to Rs 11.38.
The company's assets under management saw an increase with total assets reaching Rs 2,93,532.91 crore as of March 31, 2025, up from Rs 2,37,276.38 crore a year earlier. Gross NPA and net NPA ratios stood at 4.55 percent and 2.64 percent respectively, while capital adequacy was reported at 20.66 percent.
Along with the Q4FY25 results, the company also announced a final dividend of Rs 3 per equity share.
Shriram Finance had released its results for Q4FY25 just before markets closed on April 25, prompting an 8 percent fall at end the last session. The shares have now significantly extended the losses to fall 14 percent in just two trading sessions.
After the Q4FY25 net profit and net interest income failed to meet analyst estimates, ICICI Securities cut the stock's rating to 'Hold', with a target price of Rs 640 apiece. This however implies an upside potential of nearly 7 percent from the current market price.
CLSA however maintained its 'Outperform' rating and hiked its target price to Rs 735 apiece to Rs 670 apiece. HSBC also maintained its 'Buy' rating, but cut its target price to Rs 740 apiece from RS 810 apiece.
Macquarie maintained its 'Outperform' rating with a target price of Rs 800 apiece. The brokerage however noted that the net profit remains a miss.
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