Shriram Finance (SHFL IN) – Q2FY27 Result Update – Expect 17% growth for FY27; NIM to Moderate – BUY
Published on 24 Oct 2026
Q2FY27 AUM grew 17% YoY to INR3,290.2bn, led by healthy growth across CV, PV, MSME and Gold portfolio. Management revised its FY27 AUM growth guidance to 15-17% from 18% earlier, amid geopolitical uncertainties and weak monsoon conditions. We build in AUM growth of 17%/18% for FY27E/FY28E. Reported NIM improved to 9.5% in Q2FY27, supported by lower incremental CoF and the recent capital infusion. However, NIM is expected to moderate over the medium term as fresh borrowings increase and share of lower-yielding new vehicle loans rises. We expect NIM (calc.) at 10.5%/9.9% for FY27E/FY28E. Asset quality remained broadly stable, though rural stress on account of drought situation warrants monitoring. We factor in credit costs of 2.2%/2.0% for FY27E/FY28E. We revise our FY27 estimates to reflect a better margin profile, and marginally tweak FY28/FY29 estimates. Reiterate ‘BUY’ with a multiple of 2.2x on Sep’28 P/ABV (vs. 2.3x earlier) and a revised TP of INR1,200 (INR1,250 earlier).
