BENGALURU (Reuters) – India’s Shriram Finance reported a 18% rise in first-quarter profit on Friday on strong demand in its key lending segments.
The company earned a standalone net profit of 19.81 billion rupees ($11.9 million) in the quarter ended June 30, compared to 16.75 billion rupees, a year ago.
Its shares, which were up around 4% before the results, rose as much as 8.5%.
Shriram Finance’s earnings were boosted by higher commercial vehicle sales – which form its biggest financing segment – along with strength in its farm equipment and small business credit segments, industry data showed.
The non-banking financial company (NBFC) was formed in 2022 with the merger of Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital.
Shriram Finance’s net interest income, the difference between interest earned and paid, rose 20.6% to 53.54 billion rupees, beating analysts’ estimate of 52.91 billion rupees as per LSEG data.
NBFCs accept fixed deposits and pay out interest on them, but not take demand deposits like traditional banks. Demand deposits allows withdrawals anytime, while fixed deposits have a lock-in period.
Its assets under management (AUM) rose nearly 21% to 2.33 trillion rupees as of end-June from a year ago.
Commercial Vehicle loans, which accounts for about 50% of its total AUM, grew 14% to 1.10 trillion rupees, while loans to medium and small industries grew nearly 44%.
($1 = 83.7171 Indian rupees)
(Reporting by Nishit Navin in Bengaluru; Editing by Varun H K)
