Shriram Finance (SHFL IN) – Q1FY27 Result Update – Healthy growth; strong expansion in margin – BUY
Published on 25 Jul 2026
Q1FY27 AUM grew 15.3% YoY to INR3,138.0bn, led by healthy across CV, PV, Farm equipment and Gold portfolio. Management reiterated its FY27 AUM growth guidance of ~18%, supported by improving momentum in new vehicle finance and continued scale-up of non-VF portfolio. We build 17%, factoring in geopolitical uncertainties and the impact of a delayed monsoon. Reported NIM expanded driven by improved yields; we expect it to trend at 9.7% in FY28E. Headline asset quality saw a slight deterioration due to seasonality; however provision buffers remain healthy at ~6% of the loan book. We build a credit cost of 2.0%/ 1.9% in FY27/FY28E. We tweak our FY27/ FY28E estimates upwards on better margin, positive growth outlook and controlled credit cost. Reiterate ‘BUY’ with an unchanged multiple of 2.4x on Mar’28 ABV and a TP of INR1,250. Impact of a delayed monsoon and El-Nino to be a key monitorable in Q2.
