Shriram Finance profit jumps 59.90% YoY, but margin slips sequentially
Revenue grew 16.16% YoY as interest expense fell 3.63%; faster sequential expense growth cut operating margin by 0.72 percentage points.
Filed 24 Jul 2026, 13:50 IST · Shriram Finance Ltd (SHRIRAMFIN)
Key takeaways
- Consolidated net profit grew 59.90% YoY as revenue rose 16.16% while interest expense fell 3.63%.
- Sequentially, expenses grew 12.45% against 7.09% revenue growth, cutting operating margin by 0.72 percentage points.
- Assets under Management rose 15.26% YoY to Rs 313,798.39 cr, while operating margin stayed 12.8 percentage points above the 22-peer sector median.
Price around the results
Profit growth was led by revenue and lower interest costs
Consolidated revenue increased 16.16% YoY, while expenses grew 11.05%, allowing operating profit to rise 17.11%. Interest expense fell 3.63% YoY, helping pre-tax profit grow 59.17% and net profit 59.90%. Sequentially, net profit still rose 14.29%, supported by 7.09% revenue growth and a 2.47% decline in interest expense.
Sequential cost growth narrowed the operating margin
Expenses grew 12.45% QoQ, faster than the 7.09% increase in revenue, so operating margin declined 0.72 percentage points. The YoY comparison is better: costs grew 11.05% against 16.16% revenue growth, lifting margin by 0.69 percentage points. Other income contributed only 0.4% of pre-tax profit, so reported earnings were not materially dependent on it; however, the sequential tax-rate increase of 2.45 percentage points limited the conversion of pre-tax growth into net profit.
AUM growth remains strong, while margins recover from the Q3 dip
Management said Assets under Management increased 15.26% YoY to Rs 313,798.39 cr as of June 30, 2026. The company said its network comprised 3,225 branches serving 103.01 lakhs of customers. Operating margin moved from 84.33% in Q1FY26 to 85.03% in Q2FY26, fell to 83.07% in Q3FY26, rose to 85.74% in Q4FY26 and eased to 85.02% in Q1FY27, rather than declining for a third straight quarter.
The stock's fall was smaller than its typical results-day move
The stock fell 1.93% on the reported results day, with a 2.16 times volume ratio and a 1.50% relative decline. Across the past eight results reactions, moves were evenly split between four advances and four declines, while the median absolute move was 3.00%, making this decline smaller than the stock's typical reaction. The company told investors that changes under the New Labour Codes had created incremental impacts of Rs 131.73 cr on gratuity and Rs 65.26 cr on long-term compensated absences for the year ended March 31, 2026.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹13,400 cr | ₹12,513 cr | +7.09% | +16.16% |
| Other income | ₹18 cr | ₹19 cr | -3.22% | +199.18% |
| Expenses | ₹2,007 cr | ₹1,785 cr | +12.45% | +11.05% |
| Operating profit | ₹11,393 cr | ₹10,728 cr | +6.20% | +17.11% |
| Operating margin (%) | 85.02% | 85.74% | — | — |
| Interest | ₹5,204 cr | ₹5,336 cr | -2.47% | -3.63% |
| Depreciation | ₹183 cr | ₹175 cr | +4.65% | +5.59% |
| Profit before tax | ₹4,626 cr | ₹3,917 cr | +18.08% | +59.17% |
| Tax | ₹1,178 cr | ₹902 cr | +30.60% | +56.92% |
| Net profit | ₹3,453 cr | ₹3,021 cr | +14.29% | +59.90% |
| EPS (₹) | ₹14.86 | ₹16.06 | -7.47% | +29.44% |
Operating margin of 85.02% compares with a Financial Services sector median of 72.22% across 22 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.93% | -1.50% |
Volume on the results session was 2.16× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Assets under Management increased 15.26% year-on-year to Rs. 313,798.39 crores as of June 30, 2026.
- The company had a pan-India network of 3,225 branches and served 103.01 lakhs of customers.
Competition
- The company describes itself as one of India’s largest retail asset financing NBFCs and a leader in organised financing of pre-owned commercial vehicles and two-wheelers.
Problems & risks
- New Labour Codes caused incremental employee benefit impacts of Rs. 131.73 crores on gratuity and Rs. 65.26 crores on long-term compensated absences.
What to watch
- Whether operating margin holds above 85.02% after the 0.72-percentage-point sequential decline.
- Whether expenses grow slower than revenue after rising 12.45% QoQ against 7.09% revenue growth.
- Whether AUM growth remains near the reported 15.26% YoY pace.