Shriram Finance Q2 Outlook: NII and Profit Up 18% YoY

Shriram Finance, recently added to the Nifty 50 index, is set to announce its Q2 results on October 25. Investors looking to invest in stocks are eagerly anticipating this announcement. The retail non-banking lender is expected to report growth in net interest income (NII) and profits. The forecasted results are supported by strong loan disbursements and overall growth in the company’s lending operations.

Earnings forecast

Industry analysts project Shriram Finance's NII will rise by 18% year-on-year (YoY) to ₹5,430 crore in Q2FY25, up from ₹4,594 crore in Q2FY24. Profits are also expected to see an 18.6% increase YoY, reaching ₹2,077 crore compared to ₹1,750 crore in the same quarter last year.

Factors contributing to earnings growth

Several key factors are driving the expected earnings growth for Shriram Finance this quarter: 

• AUM growth: Analysts estimate a 20% YoY growth in assets under management (AUM), reaching ₹2.4 lakh crore in Q2FY25, compared to ₹2 lakh crore a year earlier. This growth is crucial for those looking to invest in stocks, as it indicates a solid lending position.
• Margin contraction: Margins for Shriram Finance are anticipated to contract by 37 basis points YoY to 9.5% in Q2FY25, down from 10% in Q2FY24. However, a slight sequential improvement is expected, with margins forecasted to expand by 6 basis points from 9.57% in the previous quarter.

Key takeaways

1. Shriram Finance's Q2 results are expected on October 25.
2. NII is projected to rise by 18% YoY to ₹5,430 crore.
3. Profits are anticipated to increase by 18.6% YoY to ₹2,077 crore.
4. AUM is forecasted to grow 20% YoY, reaching ₹2.4 lakh crore.
5. Margins are expected to contract slightly to 9.5% but improve sequentially.

Investors interested in stocks should keep an eye on Shriram Finance's forthcoming earnings announcement, as it indicates a healthy growth trajectory.