Shriram Finance conducted conference call on 24 January 2025 to discuss its financial results for the quarter ended December 2024. Umesh Revankar, Executive Vice Chairman of the company addressed the call:

Highlights:

The disbursements of the company increased 16% to Rs 43756 crore in Q3FY25 from Rs 37787 crore in Q3FY24.

Asset under management increased 19% yoy and 4% on sequential basis to Rs 254469 crore end December 2024.

The net interest margin declined to 8.48%

The profit of the company after gains of Rs 1489.39 crore net of taxes on stake sale in subsidiary shot up 96%. The profit excluding exceptional items increased 14.4% to Rs 2080.37 crore in Q3FY25.

The GNPA ratio rose slightly to 5.38% and net NPA to 2.68% end December 2024.

The credit cost stood at 1.85% in Q3FY25 compared with 1.84% in the previous quarter and 2.15% in the corresponding quarter last year. The company expects to maintain credit cost below 2%.

The borrowings of the company increased to Rs 2.23 lakh crore from 2.07 lakh crore on sequential basis.

The retail deposits accounted for 25% of the liabilities. The bank borrowings were at 21%, offshore borrowings 19%, securitization stood at 17% and capital market 17%.

The company has conducted a significant ECB transaction of US$ 1.2 billion in Q3.

The cost of borrowings has declined marginally to 8.95% from 8.97%.

LCR was strong at 265%. With the ECB transaction, the liquidity position of the company has increased from Rs 17000 crore to Rs 22000 crore The company expects to reduce surplus liquidity to normalized levels in the next 1-2 quarters.

The excess liquidity impacted NIM by 20 bps in Q3FY2025.

The company is pushing for growth in the gold segment and it will start growth from Q4FY2025.

The company has added 1614 new employees in Q3FY25 contributing to increase in employee expenses.

The exposure to the mining sector in Karnataka has become negligible.