Shares of Shriram Finance Ltd plunged sharply by 7.14% today to ₹608.45, extending their post-earnings decline to nearly 16% since the company announced its Q4 FY25 results on April 25.
The Non-Banking Financial Company (NBFC) major reported a consolidated net profit of ₹2,139.4 crore for the quarter ended March 31, 2025, slightly below CNBC-TV18’s estimate of ₹2,142.9 crore. Despite the minor miss, the bottom-line growth was a healthy 9.9% year-on-year.
However, what particularly weighed on sentiment was the miss in Net Interest Income (NII), which grew 9.4% YoY to ₹5,565.5 crore, falling short of the Street’s expectation of ₹5,878.1 crore.
Key highlights:
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Asset Quality:
The gross non-performing asset (NPA) ratio improved sequentially to 4.55% from 5.38% in Q3, while net NPA dipped slightly to 2.64% from 2.68%. -
Provision Coverage:
The provision coverage ratio fell to 43.28% from 51.64% in the previous quarter, indicating a lower buffer against potential credit losses. -
Dividend:
Shriram Finance recommended a final dividend of ₹3 per share for FY25, subject to shareholder approval at the upcoming 46th Annual General Meeting (AGM).
Stock performance:
Following the results, Shriram Finance shares fell more than 8.8% intraday immediately after the announcement, and continued to decline in the following sessions. Today, the stock hit a low of ₹608.45, significantly down from its pre-results closing of ₹725.
At current levels, the company’s market capitalization stands at approximately ₹1.17 trillion, with a P/E ratio of 12.53 and a dividend yield of 1.45%.
Outlook:
Despite a steady improvement in asset quality, concerns around missed NII expectations and lower provision coverage seem to be dampening investor sentiment. Analysts suggest that while the long-term fundamentals remain intact, the stock may face near-term volatility until growth visibility and margin stability improve.
