Shriram Finance shares traded flat on Friday ahead of the company’s third-quarter results announcement later in the day.
The stock of the flagship company of diversified conglomerate Shriram Group opened with a gap-up gain of 2.56 percent and touched an intraday high of Rs 541.80 on the NSE, registering a 4.46 percent rise.
However, by 10:30 AM, it pared gains and was trading at Rs 533.80, up 0.76 percent from the previous close. This marked the second consecutive session of gains for the counter.
Shriram Finance is set to release its financial results for the quarter ended December 31, 2024, post market hours. The company has scheduled a conference call at 7 PM today, where the management will discuss the performance and provide key updates.
Loan Growth Seen at 18% YoY
According to Kotak Institutional Securities, the company is expected to post an 18 percent year-on-year (YoY) growth in loans for Q3FY25, with sequential growth pegged at 4 percent. The Core Net Interest Margin (NIM) is likely to remain stable at 10.7 percent quarter-on-quarter (QoQ), as borrowing costs are anticipated to have peaked. Core profit before tax (PBT) is projected to increase by 13 percent YoY.
Bloomberg’s consensus estimates project the Gross Non-Performing Assets (GNPA) for the quarter at 5.36 percent indicating a steady trend in asset quality.
Mixed Trends in NBFC Disbursements
Analysts at Axis Securities noted mixed disbursement trends across non-banking financial companies (NBFCs) in Q3, which could lead to varied asset under management (AUM) growth performances.
“Margins are expected to remain steady with a slight negative bias across lenders, driving a 20% YoY and 5% QoQ growth in Net Interest Income (NII) for the NBFC coverage universe, including Shriram Finance and Bajaj Finance,” Axis Securities stated.
The brokerage also expects a sequential improvement in disbursement momentum for housing financiers under its coverage, including Shriram Finance and Bajaj Finance. Asset quality is likely to improve on a quarter-on-quarter basis, while credit costs are expected to remain stable.
Shriram Finance reported a 20 percent increase in consolidated net profit at Rs 2,153 crore for the second quarter for the current fiscal year.
The company's asset quality improved with gross Non-Performing Assets (NPAs) declining to 5.32 per cent of gross advances as of September 30, 2024, from 5.79 per cent by the end of the second quarter of the previous fiscal. Net NPAs also moderated to 2.64 per cent of the advances, from 2.80 per cent at the end of September last year.
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