Shriram Finance Q1 FY27 Results (NSE: SHRIRAMFIN)
Signal: Earnings grew
The read
Q1FY27 standalone PAT of ₹3,445 Cr (+59.8% YoY) was powered by a 16% revenue rise, a 3.6% decline in finance costs (benefiting from the MUFG equity infusion), and stable credit costs. The operating margin expanded 908bps YoY to 34.5%, the highest in recent quarters. Asset quality remained steady with GNPA at 4.58% and NNPA improving to 2.33%. The 20% equity dilution to MUFG strengthened the balance sheet (CRAR jumped to 34.17%, debt-equity dropped to 2.14x), but EPS growth (29.4%) lagged PAT growth, a new pattern to watch.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹13,393.68 Cr | 16.1% | 7.1% |
| EBIT | ₹4,622.11 Cr | 59.0% | |
| Net profit | ₹3,444.56 Cr | 59.8% | |
| EPS | ₹14.83 | 29.4% | |
| EBIT margin | 34.49% |
P&L walk
Consolidated figures not filed; standalone analysis covers the entire business as the company operates in a single segment.
Segments
The company operates as a single reportable segment (financing) in a single geographical segment (domestic); no segment-level breakdown is available.
Key positives
- Finance costs declined 3.6% YoY to ₹5,204 Cr, the first decline in recent quarters, reflecting lower cost of borrowing post the MUFG equity infusion.
- Operating profit (PBT) grew 59% YoY to ₹4,622 Cr, with operating margin expanding 908bps YoY to 34.5% — the highest in at least 5 quarters.
- Net NPA ratio improved 24bps YoY to 2.33%, and provision coverage ratio rose 603bps YoY to 50.34%, indicating improving asset quality.
- Capital adequacy ratio (CRAR) more than doubled to 34.17% (vs 20.79% in Q1FY26), well above regulatory minimum, post the ₹39,618 Cr preferential allotment.
- Debt-equity ratio reduced sharply to 2.14x from 4.15x a year ago, strengthening the balance sheet.
Key concerns
- EPS growth of 29.4% YoY lagged PAT growth of 59.8% due to a 25% dilution from the MUFG preferential allotment — ROE will face headwinds from the expanded equity base.
- Credit costs (impairments) grew 13.8% YoY to ₹1,463 Cr, though slower than revenue growth; GNPA remained flat at 4.58% (high by NBFC standards), requiring continued monitoring.
- Employee costs rose 17% YoY, in line with revenue growth, but the QoQ jump of 18% (partly due to annual increments) bears watching.
Research and educational content only. Not investment advice.