Shriram Finance Limited — Investor Meet, 28-01-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Shriram Finance reported disbursement growth of 15.82% year-on-year, totaling ₹43,766.27 crore for Q3 FY25, alongside an 18.78% increase in Assets Under Management (AUM) to ₹2,54,469.69 crore. The net interest income grew by 14.31%, reaching ₹5,822.69 crore. Notably, profit after tax soared 96.32% to ₹3,569.76 crore due to a one-time gain from the sale of a subsidiary, but excluding this gain, PAT still grew 14.41% to ₹2,080.37 crore. Earnings per share improved to ₹18.99, including the prior gain, and ₹11.07 without. Asset quality remained stable, with gross Stage 3 assets at 5.38%.

**Future Outlook and Growth Drivers:** Management highlighted positive credit demand from rural markets driven by agricultural growth and government projects. They anticipate robust growth in the passenger vehicle segment due to unmet demand and favorable operational economics.

**Order Book and Operational Updates:** The company is focused on strengthening its balance sheet, with an emphasis on managing liquidity due to increased ECB borrowings. Total debt outstanding stood at ₹2,00,023 crore, and the leveraging ratio improved to 4.06.

**Analyst Q&A Insights (Detailed):**

- **Revenue and Profitability:** Management indicated that net interest margins (NIMs) could recover as excess liquidity normalizes, despite some temporary declines from an asset mix shift towards lower-yielding vehicle loans.

- **Operational Challenges or Risks:** Analysts raised concerns about the decline in M&HCV sales amidst slower infrastructure spending; management remained optimistic about demand picking up in Q4 and FY26.

- **Strategic Priorities:** Initiatives like launching a green financing vertical for EV loans indicate strategic alignments with market trends.

**Market or Regulatory Updates:** No significant regulatory impacts were discussed, but positive trends in GST collections were noted, signaling potential growth in government spending.

**Strategic Focus Areas:** The overall sentiment reflects a focus on managing costs while enhancing customer service through digital initiatives, alongside traditional lending strengths.

**Investor Insight:** The company’s strong financial health, sustained growth prospects, and strategic initiatives suggest a favorable outlook, positioning it well for a ‘buy’ approach among investors, given the potential recovery in credit demand and overall economic conditions.