Shriram Finance profit jumps as lower interest costs offset margin pressure
Consolidated operating margin fell for a second straight quarter as expenses outpaced revenue, but interest costs declined and other income was only 0.32% of pre-tax profit.
Filed 23 Oct 2026, 16:43 IST · after market close · Shriram Finance Ltd (SHRIRAMFIN)
Key takeaways
- Expenses grew +19.80% year on year against revenue growth of +15.78%, narrowing operating margin by 0.91 percentage points.
- Profit before tax rose +58.43% as interest expense fell -10.13% year on year, while the tax rate declined by 0.35 percentage points.
- Operating margin of 72.99% remained 8.37 percentage points above the 64.62% median for 22 Financial Services peers.
Price around the results
Profit growth came from lower interest costs
Shriram Finance reported consolidated net profit growth of +59.19% year on year, with profit before tax rising +58.43%. Interest expense fell -10.13% year on year and -4.60% sequentially, providing the main support to pre-tax profit. The lower tax rate, down 0.35 percentage points year on year, also helped, though other income was only 0.32% of pre-tax profit and did not materially affect earnings quality.
Costs outpaced revenue for the second quarter running
Revenue grew +15.78% year on year, but expenses increased faster at +19.80%, reducing operating margin by 0.91 percentage points to 72.99%. Sequentially, revenue rose +2.93% while expenses increased +9.36%, cutting margin by 1.59 percentage points. This extends the margin decline from 75.19% in Q4FY26 to 74.58% in Q1FY27 and 72.99% in Q2FY27.
Margin stayed above the peer median despite the decline
Shriram Finance's 72.99% operating margin was 8.37 percentage points above the 64.62% median among 22 Financial Services peers that had reported the quarter. The comparison remains favourable, but the two-quarter sequential decline shows that relative margin strength has not prevented recent cost pressure.
Management disclosed loan additions and labour-cost impacts
Management said the company acquired 92,791 unsecured loan accounts through assignment during the quarter and did not acquire any stressed loans. The presentation also disclosed incremental employee-benefit impacts of Rs 131.73 cr for gratuity and Rs 65.26 cr for long-term compensated absences from the change in wage definitions under the New Labour Codes.
Results were filed after market close
The results were filed after market close, so there was no current-session market reaction to assess. Across the last eight results reactions, the stock rose three times and fell five times, with a median absolute move of 2.79%, providing the recent historical context for its post-results trading.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹13,792 cr | ₹13,400 cr | +2.93% | +15.78% |
| Other income | ₹16 cr | ₹24 cr | -33.54% | +19.02% |
| Expenses | ₹3,725 cr | ₹3,406 cr | +9.36% | +19.80% |
| Operating profit | ₹10,068 cr | ₹9,995 cr | +0.73% | +14.36% |
| Operating margin (%) | 72.99% | 74.58% | — | — |
| Interest | ₹4,965 cr | ₹5,204 cr | -4.60% | -10.13% |
| Depreciation | ₹180 cr | ₹183 cr | -1.57% | +3.11% |
| Profit before tax | ₹4,939 cr | ₹4,631 cr | +6.64% | +58.43% |
| Tax | ₹1,255 cr | ₹1,178 cr | +6.49% | +56.26% |
| Net profit | ₹3,684 cr | ₹3,453 cr | +6.69% | +59.19% |
| EPS (₹) | ₹15.66 | ₹14.86 | +5.38% | +27.32% |
Operating margin of 72.99% compares with a Financial Services sector median of 64.62% across 22 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company acquired 92,791 unsecured loan accounts through assignment during the quarter ended September 30, 2026.
- The company did not acquire any stressed loans during the quarter ended September 30, 2026.
Problems & risks
- New Labour Codes increased employee benefits expenses by Rs. 131.73 crores for gratuity and Rs. 65.26 crores for long-term compensated absences.
What to watch
- Whether operating margin holds above 72.99% after two consecutive quarterly declines.
- Whether expense growth moderates from +19.80% year on year relative to revenue growth of +15.78%.
- The next disclosure on acquired unsecured loan accounts after the quarter's 92,791 accounts and the absence of stressed-loan acquisitions.