1 week Ago By NDTV Profit News
Shriram Finance plans to target a stable net interest margin of around 8.5% in the current financial year, Executive Vice Chairperson Umesh Revankar has said after the company faced a challenging fiscal 2025, with a pressure on its NIM.Shriram Finance's standalone net profit rose 9.
9% to Rs 2,139.4 crore in the quarter ended March, meeting analysts' estimates. However, brokerages flagged concerns over the net-interest-margin pressure, higher credit costs and a sharp increase in gross stage-2 loans during the quarter.
Its NIM narrowed 23 basis points sequentially to 8.25%."If you look at the last quarter, at the end of December, we had a couple of vocations of raising long-term only resources, which normally do not happen every time," Revankar told NDTV Profit on Monday.
"We are confident of utilising the same in the first two quarters of this financial year.""We would like to maintain an interest margin of around 8.5%.
Even during the last full financial year, it was 8.55%. So, this financial year also, (it) will be around that target," Revankar said.
On the impact of the Reserve Bank of India's move to lower the repo rate earlier this month, Revankar explained that 14% of the non-banking financial company's loans were floating rate, while 86% were fixed."The impact of the floating repo rate will be lower. However, as fixed tenures end, we will raise fresh resources at cheaper rates," he said.
"In three to six months, we should benefit from the reduced repo rate, with some benefit passed on to customers."Shriram Finance Shares Dip For Second Straight SessionRevankar also highlighted that the extent to which the rate cut was passed on would depend on factors like the specific customer segment, niche and prevailing market conditions.Acknowledging the impact of credit costs on the fourth-quarter net profit, Revankar explained that there were some elevated delays by customers in the third and fourth quarters.
However, he added, the company managed to control things within limits since most of its lending was against secured assets like vehicles, machinery and property.Credit cost remained around 1.91% for the full fiscal, with last quarter at 2.
07%. But it is manageable, and the company expects it to remain under control, according to Revankar.On the outlook, he suggested that any potential tapering in credit costs would likely not happen immediately in the June quarter.
"I think we need to wait for H1 to close. Monsoon prediction is very positive, likely going to be above normal average, but the impact and benefit of that will come back only in H2, so we need to wait," he explained.Tamilnad Mercantile Bank Targets 13–14% Deposit Growth In FY26.
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