Introduction:
Shriram Finance, India’s largest retail non-banking financial company (NBFC), has delivered impressive financial results for Q1 FY25. The company’s net profit surged by 18.6% year-on-year to Rs 2,030.64 crore, driven by a strong increase in net interest income and improvements in asset quality.
Financial Highlights:
Net Profit: Shriram Finance reported a net profit of Rs 2,030.64 crore for Q1 FY25, marking an 18.6% increase from Rs 1,712.19 crore in Q1 FY24.
Net Interest Income (NII): The company’s NII grew by 21% to Rs 5,554.87 crore from Rs 4,580 crore in the same period last year.
- Total Assets Under Management (AUM): AUM rose by 21% to Rs 2,33,443.63 crore, up from Rs 1,93,214.67 crore in Q1 FY24.
- Earnings Per Share (EPS): Consolidated EPS increased by 18.21% to Rs 53.82 compared to Rs 45.53 in Q1 FY24.
Cost-to-Income Ratio: The cost-to-income ratio improved to 27.45%, down from 28.85% in the previous year.
Liquidity Coverage Ratio: The liquidity coverage ratio increased to 225.19%, up from 202.84% in June 2023.
Shriram Finance Reports Strong Q1 FY25: Net Profit Jumps 18.6% to Rs 2,030 Crore:
Asset Quality and Credit Performance:
Gross NPA: The gross non-performing assets (NPA) decreased to 5.39% from 5.45% in the previous quarter and 6.01% in Q1 FY24.
Net NPA: Net NPA marginally increased to 2.71% from 2.70% in Q4 FY24 but showed improvement from 2.96% in Q1 FY24.
Management Commentary:
Umesh Revankar, Executive Vice-Chairman of Shriram Finance, highlighted that the improvement in net profit was supported by a marginal reduction in liability costs and enhanced credit quality. He noted, “The improvement in credit cost and Stage III assets contributed positively to our overall performance.”
Operational Footprint:
Shriram Finance boasts an extensive pan-India presence with 3,095 branches and a workforce of 75,813 employees, serving 8.71 million customers.
Conclusion:
Shriram Finance’s solid Q1 performance underscores its robust operational and financial health. The notable rise in net profit and NII reflects effective management and strategic growth initiatives. The reduction in gross NPA and improved cost-to-income ratio indicate enhanced asset quality and operational efficiency.
The company’s strong liquidity coverage and substantial AUM growth position it well for sustained growth and resilience in a dynamic financial environment.
Frequently Asked Questions FAQ:
1. What are Shriram Finance’s net profit figures for Q1 FY25?
- Shriram Finance reported a net profit of Rs 2,030.64 crore for the first quarter of FY25, which represents an 18.6% increase compared to Rs 1,712.19 crore in Q1 FY24.
2. How much did the net interest income (NII) grow in Q1 FY25?
- The net interest income for Q1 FY25 grew by 21% to Rs 5,554.87 crore, up from Rs 4,580 crore in the same quarter of FY24.
3. What is the total assets under management (AUM) for Shriram Finance as of Q1 FY25?
- Shriram Finance’s total AUM increased by 21% to Rs 2,33,443.63 crore in Q1 FY25, compared to Rs 1,93,214.67 crore in Q1 FY24.
4. How did the earnings per share (EPS) change in Q1 FY25?
- Consolidated EPS for Q1 FY25 rose by 18.21% to Rs 53.82, up from Rs 45.53 in Q1 FY24.
5. What was the liquidity coverage ratio at the end of Q1 FY25?
- The liquidity coverage ratio was at 225.19% in Q1 FY25, an improvement from 202.84% at the end of June 2023.
6. How did the cost-to-income ratio perform in Q1 FY25?
- The cost-to-income ratio improved to 27.45% in Q1 FY25, compared to 28.85% reported in Q1 FY24.
7. What are the gross and net non-performing asset (NPA) percentages for Q1 FY25?
- The gross NPA decreased to 5.39% in Q1 FY25 from 5.45% in Q4 FY24 and 6.01% in Q1 FY24. Net NPA slightly increased to 2.71% from 2.70% in Q4 FY24 but improved from 2.96% in Q1 FY24.
8. What improvements did Shriram Finance see in credit costs and Stage III assets?
- The company saw improvements in credit costs and Stage III assets, with Stage III assets reducing from 5.45% in the previous quarter to 5.39% in Q1 FY25.
9. How many branches and employees does Shriram Finance have?
- Shriram Finance operates with a network of 3,095 branches and employs 75,813 people.
10. How many customers does Shriram Finance serve?
- The company serves approximately 8.71 million customers across its extensive branch network.
11. What factors contributed to the improvement in Shriram Finance’s net profit?
- The increase in net profit was driven by a marginal reduction in liability costs, better credit quality, and improved Stage III assets.
12. How does Shriram Finance’s performance in Q1 FY25 compare to previous periods?
- Shriram Finance’s performance in Q1 FY25 reflects strong growth in profitability and operational efficiency, with significant improvements in net interest income, asset quality, and cost management compared to previous quarters.
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