StoxBox on Shriram Finance Q4 FY24
The recent introduction in the head index, Shriram Finance Ltd. came out with a healthy set of numbers during the quarter with strong growth in net profit and decent improvement in operational metrics. Net interest income came above street expectations as there was good growth in the AUM of key segments. Even in the elevated interest rate environment, the company showcased a growth in NIMs as the cost ratios improved, aided by expansion in the branch network. As the interest rate cycle is at its peak, we feel that the NBFC is placed well for future growth as cost of funds will likely decrease further. Also, the company’s focus on digital presence through its ‘Shriram One’ app will help in increasing its geographical presence and AUM growth. Hence, we remain positive on the company’s medium to long term growth prospects.
Shriram Finance Ltd. Q4FY24 Result First Cut – Healthy numbers; Growth path looking strong
- Net interest income (NII) stood at Rs. 5,336 crores in Q4FY24, up 4.8% QoQ / 20.0% YoY and came in above street expectations.
- Operating profit for the quarter stood at Rs. 3,095 crores against Rs. 3,689 crores in Q3FY24 and Rs. 3,081 crores in the same quarter previous year.
- Standalone Profit after Tax increased to Rs. 1,946 crores in Q4FY24, up 7.0% QoQ / 48.7% YoY, largely in line with market estimates.
- Assets under management (AUM) grew to Rs. 2,25,862 crores as of 31 March 2024 from Rs. 2,14,233 crores as of 31 December 2023 and Rs. 2,02,641 crores as of 31 March 2023.
- NIM stood at 9.02% in Q4FY24, as against 8.99% in Q3FY24 and 8.55% in Q4FY23.
- RoA in the quarter stood at 3.19% as against 3.11% in Q3FY24 and 2.47% in Q4FY24.
- Cost-to-income ratio stood at 26.68% during the quarter, down 40bps QoQ / 347bps YoY, showcasing decent improvement.
- Capital adequacy ratio stood at 20.3% in Q4FY24, down from 21.0% in Q3FY24 and 22.6% from the same quarter in the previous year.
- Gross NPA decreased in Q4FY24 to 5.45% compared to 5.66% in Q3FY24 and 6.21% in Q4FY23.
- Net NPA stood at 2.72% in the quarter, down 2bps QoQ / down 49 bps YoY.
- The company’s subsidiary, Shriram Housing Finance, reported a net profit of Rs. 62 crores for the quarter, which was flat QoQ but grew significantly from Rs. 37 crores in Q4FY23.
- The board of directors recommended a final dividend of Rs. 15 per equity share. This is in addition to the two interim dividends of Rs. 20 and Rs. 10 per equity share announced earlier.