Shriram Finance Profit Jumps 59% to 3,684 Crore Rupees in Q2
Key Facts
Shriram Finance’s consolidated net profit jumped 59% to 3,684 crore rupees in the second quarter of fiscal 2027, from 2,314 crore rupees in the same period a year earlier, according to figures reported by Business Standard. The executive vice chairman said rising demand in the auto sector after Goods and Services Tax 2.0 reforms was the main reason for the increase in profit. Total income rose 16% to 13,802 crore rupees, compared with 11,921 crore rupees in the July-to-September period a year earlier. Net interest income also climbed 38% to 8,661.04 crore rupees, from 6,266.84 crore rupees a year ago. The figures place profit growth in the context of expanding income tied to financing activity, while asset quality and credit costs remain areas investors are monitoring.
Assets under management stood at 3,29,021 crore rupees on September 30, up from 2,81,309.46 crore rupees in September 2025 and 3,13,798.39 crore rupees in the first quarter of fiscal 2027, Business Standard reported. On a consolidated balance sheet, loans reached 3,07,833.55 crore rupees at the end of September, compared with 2,82,452.44 crore rupees at the end of March, an increase of 9% over six months. In the first half of fiscal 2027, consolidated net profit was 7,136.58 crore rupees, compared with 4,473.55 crore rupees in the corresponding period. These comparisons point to continued growth in the business over both the annual and half-year periods. But the balance-sheet expansion coincided with higher impairment provisions for financial instruments, linking the reading of profit growth to developments in the cost of risk as well.
Net interest margin was 9.52% in the second quarter, below Bloomberg’s estimate of 9.63%, according to NDTV Profit. Financing costs fell 10.1% to 4,964.90 crore rupees, while impairment provisions for financial instruments rose 40.8% to 1,877.40 crore rupees. Credit costs totaled 1,880 crore rupees, equivalent to an annualized rate of 2.35%, compared with 1.9% in the first quarter of fiscal 2027 and in fiscal 2026. Gross non-performing assets rose to 4.65% from 4.57% a year earlier, while net non-performing assets fell to 2.31% from 2.49%. The indicators show diverging trends in asset quality: higher gross delinquencies alongside lower net delinquencies, with credit costs and provisions increasing during the quarter.
Stage 2 assets, or loans showing signs of credit deterioration before being classified as non-performing, rose 10 basis points quarter on quarter to 7.05%, from 6.95% in the previous quarter and 6.9% a year earlier, according to Business Standard. The newspaper quoted management as saying monsoon-season pressures hurt production of rice, soybeans, corn, cotton and pulses. It added that tensions in West Asia caused fertilizer shortages and affected rural consumer demand. In this context, management said credit costs could temporarily rise by 30–40 basis points over the next one or two quarters because of seasonal pressures in drought-affected areas. It set a ceiling for credit costs of 2.3% for fiscal 2027, according to the newspaper. These factors make collections and loan portfolio quality increasingly important to monitor in coming periods.
Concerns over credit costs and asset quality were reflected in the stock’s trading after the results announcement, with shares falling more than 8% to 823.50 rupees, according to Business Standard. The newspaper reported that the company cut its fiscal 2027 assets-under-management growth guidance to a range of 15–17%, from 18%. The revision came as assets under management reached 3,29,021 crore rupees at the end of September. Management also estimated that credit costs could rise temporarily, while keeping the annual ceiling at 2.3%. The share move and guidance cut put the market’s response to the growth trajectory and credit risks at the center, despite higher quarterly profit.
The board declared an interim dividend of 6.50 rupees per share for fiscal 2026-2027 and set October 29, 2026, as the record date for eligible shareholders, according to NDTV Profit. The board also approved a borrowing plan through debt securities for the period from November 1, 2026, to January 31, 2027. The plan includes renewal of a limit for private placements of debt securities of up to 35,000 crore rupees, according to Financial Express. The record date determines eligibility for the dividend, while the borrowing plan covers the following three months starting in November. Credit costs and asset growth remain among the key indicators to watch as these plans are carried out during the fiscal year.