Management Or Ownership Change
Expected: 2 yearsHIGH confidence
What: Equity Stake: 20%
Impact: 100 bps borrowing cost reduction
“we believe the 100 basis point advantage will get over the next two years on our borrowing cost.”
Shriram Finance Ltd: Stock Analysis & Fundamentals
Data from 4w agoShriram Finance Ltd (Finance & Investments - CV Finance) — fundamental analysis, earnings data, and key metrics. PE: 26.7. ROE: 15.6%. This stock is not currently in the Nifty 500 momentum outperformers list.
Shriram Finance Ltd Key Facts
What's Happening
🌐FII stake decreased 3.7% this quarter
🏛️DII accumulation — stake up 2.4%
Earnings Acceleration Triggers
1. Management Or Ownership Change
2 yearsHIGH
2. Asset Quality Improvement
Long termMEDIUM
3. Asset Quality (Gross Stage 3) at 4.57%
HIGH
Key Risks
1. GST rate cuts on vehicles could impact resale values and repossession losses
MEDIUM2. US tariffs impacting MSME segments dependent on exports
LOWSector-Specific Signals
Total Assets Under Management₹2,81,309.46 Cr+15.74%
Net Interest Margin8.19%-55 bps
Gross Stage 3 Assets4.57%-75 bps
Cost to Income Ratio27.76%-19 bps
Key Numbers
Current Price
₹1,037
Dividend Yield
0.95%
Market Cap
2.4L Cr
Valuation
N/AWhy Are Shriram Finance Ltd's Earnings Accelerating?
Based on Q3 FY26 earnings • Updated Apr 18, 2026
Asset Quality Improvement
Expected: Long termMEDIUM confidence
What: Gross Stage 3: 4.57%
Impact: 10-20 bps credit cost improvement
“around 10 to 20 basis point improvement in credit cost is a possibility, because we would be able to retain our top customers.”
Asset Quality (Gross Stage 3) at 4.57%
HIGH confidence
What: Asset Quality (Gross Stage 3) at 4.57%
“On our asset quality, gross stage 3 in Q2 FY'26 stood at Rs. 4.57% and net stage 3 at 2.49%.”
AUM Growth guidance raised
HIGH confidence
What: 15.74% → 17.74%
“It may be another 2% additional growth we can get for the next half of the year.”
What Are the Key Risks for Shriram Finance Ltd?
Earnings deceleration risks from management commentary
GST rate cuts on vehicles could impact resale values and repossession losses
MEDIUMTrigger: Speculation that lower new vehicle prices due to GST cuts would depress second-hand vehicle values.
Management view: Management argues that OEMs have reduced discounts, keeping net costs to customers stable and protecting resale values.
Monitor: regulatory
US tariffs impacting MSME segments dependent on exports
LOWTrigger: Certain MSME segments have up to 60% output going to the US market.
Management view: Company is cautious and monitoring; impact currently limited to specific segments like fisheries.
Monitor: geopolitical
What Is Shriram Finance Ltd's Management Saying?
Key quotes from recent conference calls
“So, on average, it will be anywhere between 8.25 to 8.3 for the full year. [Previous Net Interest Margin (NIM) guidance]”
“The proposed partnership with MUFG will be with a 20% stake... fresh capital would be coming in with approximately US$4.4 billion. [Initiative: MUFG Strategic Partnership]”
“the speculation was very high saying that the resale value of the second-hand vehicle will come down. But... we have not seen any reduction. [Risk (regulatory): MEDIUM]”
“We have been cautious with MSME segment, especially the post the tariff, US tariff, because some of the segments are dependent on US market. [Risk (geopolitical): LOW]”
What Did Shriram Finance Ltd Report This Quarter?
Headline numbers from the latest earnings call
Revenue
₹6,266.84 Cr
YoY +11.77%
Why: Growth was driven by a 10.24% year-on-year increase in disbursements and a 15.74% growth in assets under management.
Net interest income growth slightly lagged AUM growth due to margin compression.
PAT
₹2,307.18 Cr
YoY +11.39%QoQ +7.03%
Why: Profit growth was supported by improved asset quality and a reduction in the cost to income ratio to 27.76%.
PAT growth remains consistent with the company's double-digit growth trajectory.
Other Highlights
• Disbursements reached ₹43,019.17 crore, a 10.24% YoY increase.
• Cost to income ratio improved to 27.76% from 27.95% YoY.
• Interim dividend of ₹4.8 per share (240%) declared.
What Sector Metrics Matter for Shriram Finance Ltd?
Sub-sector-specific signals from the latest concall — each with management's stated reason for the change
Total Assets Under Management
₹2,81,309.46 Cr
YoY +15.74%QoQ +3.3%
Why: Driven by broad-based disbursement growth across CV, MSME, and Passenger Vehicle segments.
Net Interest Margin
8.19%
YoY -55 bpsQoQ +8 bps
Why: Impacted by excess liquidity; management expects improvement as liquidity is deployed.
Gross Stage 3 Assets
4.57%
YoY -75 bpsQoQ +4 bps
Why: Improvement over the previous year due to better collection efficiencies.
Cost to Income Ratio
27.76%
YoY -19 bpsQoQ -153 bps
Why: Operational efficiencies and merger synergies continuing to play out.
Commercial Vehicle Disbursement
₹17,325 Cr
Why: Remains the largest segment at approximately 40% of total disbursements.
Liquidity Coverage Ratio
297%
QoQ +2900 bps
Why: Management intentionally carried higher liquidity which is now being moderated.
Credit Cost
1.68%
YoY -16 bpsQoQ +4 bps
Why: Stable asset quality environment despite regional challenges like excessive rains.
Leverage Ratio (Gearing)
3.88x
QoQ -0.27x
Why: Reduction in overall debt from ₹2,42,911 Cr to ₹2,34,000 Cr.
What Is Shriram Finance Ltd's Management Guidance?
Forward-looking targets from management for H2 FY26
Revenue Growth Target
17.74%
OPM Guidance
8.5%
Capex Plan
₹1000 Cr
Revenue Outlook
17.74% (current 15.74% + 2% additional)
Margin Outlook
NIM to reach target exit rate
Capex Plan
₹1,000 Cr to ₹1,500 Cr
Quarterly NCD borrowing for resource raising
Volume
Growth in new vehicle market share
Management Tone: BULLISH
Guidance Changes
RAISED
AUM Growth: 15.74% → 17.74%
The above analysis is parsed from publicly available earnings call transcripts. This is educational research only — not investment advice. Last updated Apr 18, 2026.
Frequently Asked Questions: Shriram Finance Ltd
Based on publicly available financial data. This is educational research, not investment advice.
What were Shriram Finance Ltd's latest quarterly results?
Shriram Finance Ltd's latest quarterly results (Dec 2025) show
- PAT Growth YoY: -22.1%
- Revenue Growth YoY: +13.8%
- Net Interest Margin: 29.00%
- Gross NPA: 4.54%
What is Shriram Finance Ltd's current PE ratio?
Shriram Finance Ltd's current PE ratio is 26.7x.
- Current PE: 26.7x
- Market Cap: 2.4 Lakh Cr
- Dividend Yield: 0.95%
What is Shriram Finance Ltd's price-to-book ratio?
Shriram Finance Ltd's price-to-book ratio is 3.2x.
- Price-to-Book (P/B): 3.2x
- Book Value per Share: ₹322
- Current Price: ₹1037
Is Shriram Finance Ltd a fundamentally strong company?
Shriram Finance Ltd's fundamental strength based on key financial ratios
- Return on Equity (ROE): 16.0%
Is Shriram Finance Ltd debt free?
Shriram Finance Ltd has a debt-to-equity ratio of N/A.
- Total Debt: ₹2.3 Lakh Cr
What is Shriram Finance Ltd's return on equity (ROE) and ROCE?
Shriram Finance Ltd's return ratios over recent years
- FY2023: ROE 17.0%
- FY2024: ROE 15.0%
- FY2025: ROE 16.0%
Is Shriram Finance Ltd's cash flow positive?
Shriram Finance Ltd's operating cash flow is negative (FY2025).
- Cash from Operations (CFO): ₹-44,000 Cr
- Free Cash Flow (FCF): ₹-40,000 Cr
- CFO/PAT Ratio: -456% (weak cash conversion)
What is Shriram Finance Ltd's dividend yield?
Shriram Finance Ltd's current dividend yield is 0.95%.
- Dividend Yield: 0.95%
- Current Price: ₹1037
Who holds Shriram Finance Ltd shares — promoters, FII, DII?
Shriram Finance Ltd's shareholding pattern (Apr 2026)
- Promoters: 20.3%
- FII (Foreign): 56.1%
- DII (Domestic): 18.6%
- Public: 4.9%
Is promoter holding increasing or decreasing in Shriram Finance Ltd?
Shriram Finance Ltd's promoter holding has decreased recently.
- Current Promoter Holding: 20.3% (Apr 2026)
- Previous Quarter: 25.4% (Dec 2025)
- Change: -5.08% (decreasing — worth monitoring)
Is Shriram Finance Ltd a new momentum entry or an established outperformer?
Shriram Finance Ltd is an established outperformer with 1 weeks of consecutive Nifty 500 outperformance.
What are the growth catalysts for Shriram Finance Ltd?
Shriram Finance Ltd has 4 key growth catalysts identified from recent earnings analysis
- Management Or Ownership Change — MUFG's entry as a strategic partner will re-rate the liability side and lower interest costs.
- Asset Quality Improvement — Ability to retain top-paying customers for longer terms through lower rates.
- Asset Quality (Gross Stage 3) at 4.57% — Strong collection performance and field executive engagement in rural and urban segments.
- AUM Growth guidance raised — Strong October demand and rural economic indicators.
What are the key risks in Shriram Finance Ltd?
Shriram Finance Ltd has 2 key risks worth monitoring
- [MEDIUM] GST rate cuts on vehicles could impact resale values and repossession losses — Speculation that lower new vehicle prices due to GST cuts would depress second-hand vehicle values.
- [LOW] US tariffs impacting MSME segments dependent on exports — Certain MSME segments have up to 60% output going to the US market.
What did Shriram Finance Ltd's management say in the latest earnings call?
In Q3 FY26, Shriram Finance Ltd's management highlighted
- "So, on average, it will be anywhere between 8.25 to 8.3 for the full year. [Previous Net Interest Margin (NIM) guidance]"
- "The proposed partnership with MUFG will be with a 20% stake... fresh capital would be coming in with approximately US$4.4 billion. [Initiative: MUFG ..."
- "the speculation was very high saying that the resale value of the second-hand vehicle will come down. But... we have not seen any reduction. [Risk (r..."
What is Shriram Finance Ltd's management guidance for growth?
Shriram Finance Ltd's management has provided the following forward guidance for H2 FY26
- Revenue growth target: 17.74%
- OPM guidance: 8.5%
- Capex plan: ₹1000 Cr for Quarterly NCD borrowing for resource raising
- Management tone: bullish
- Milestone: [RAISED] AUM Growth: 15.74% → 17.74%
What sector-specific metrics matter most for Shriram Finance Ltd?
Shriram Finance Ltd's most important sub-sector-specific KPIs from the latest concall
- Total Assets Under Management: ₹2,81,309.46 Cr (YoY +15.74%) (QoQ +3.3%) — Driven by broad-based disbursement growth across CV, MSME, and Passenger Vehicle segments.
- Net Interest Margin: 8.19% (YoY -55 bps) (QoQ +8 bps) — Impacted by excess liquidity; management expects improvement as liquidity is deployed.
- Gross Stage 3 Assets: 4.57% (YoY -75 bps) (QoQ +4 bps) — Improvement over the previous year due to better collection efficiencies.
- Cost to Income Ratio: 27.76% (YoY -19 bps) (QoQ -153 bps) — Operational efficiencies and merger synergies continuing to play out.
- Commercial Vehicle Disbursement: ₹17,325 Cr — Remains the largest segment at approximately 40% of total disbursements.
- Liquidity Coverage Ratio: 297% (QoQ +2900 bps) — Management intentionally carried higher liquidity which is now being moderated.
Is Shriram Finance Ltd worth studying for long term investment?
Based on quantitative research signals, here is why Shriram Finance Ltd may be worth studying
- Strong returns — ROE 16.0%
What is the investment thesis for Shriram Finance Ltd?
Shriram Finance Ltd investment thesis summary:
Research Signals (Bull Case)
- Growth catalyst: Management Or Ownership Change
Risk Factors (Bear Case)
- Key risk: GST rate cuts on vehicles could impact resale values and repossession losses
What is the future outlook for Shriram Finance Ltd?
Shriram Finance Ltd's forward outlook based on current data signals
- Key Catalyst: Management Or Ownership Change
- Key Risk: GST rate cuts on vehicles could impact resale values and repossession losses
The above FAQs are generated from publicly available earnings data and conference call transcripts. This is educational research only. Sector Alpha is not SEBI registered and does not provide investment advice.