Shriram Finance (SHFL IN) – Q4FY26 Result Update – Healthy growth but cautious stance amid uncertainties – BUY
Published on 25 Apr 2026
Q4FY26 AUM grew 14.8% YoY to INR 3,022.7bn, led by strong growth in the CV, PV and Gold portfolios. Company has seen pick-up in new vehicle financing; however, management remains watchful on growth due to ongoing West-Asia conflict/ fuel price hike uncertainty. We build in a CAGR of ~17% in AUM over FY26-28E led by higher volumes in VF and continued ramp-up in the non-VF portfolio. NIM came at 8.6% supported by a reduction in CoF; we expect NIM to improve by ~20bps in FY27E. Headline asset quality saw a slight deterioration due to higher stress in MSME; however company maintains adequate provision cover (~6% of total loan book). We build a credit cost of 2.0%/ 1.9% in FY27/FY28E as SHFL expands to new CV. We slightly tweak our FY27/ FY28E estimates on cautious growth outlook. Maintain ‘BUY’ with an unchanged multiple of 2.3x on Mar’28 ABV and a TP of INR 1,200.
