NIM recovery to 8.5% by Q4 FY26
Management guided that net interest margin will reach 8.5% by exit Q4, with full-year average expected between 8.25-8.3%. This assumes reduction in excess liquidity and repricing of liabilities over 18 months.
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Shriram Finance · forward-looking guidance across the available source record.
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AUM growth acceleration to ~17-18% in H2
October demand is described as very good with Q3 expected to show higher growth than the current 15.74% AUM growth rate, potentially adding another 2% growth for second half.
Deposit funding target at ~30% of liabilities
Company plans to maintain NCDs at approximately 30% of liabilities (currently at 28%) with additional funding through domestic capital markets and offshore borrowings as needed.
NIM guidance of 8.5-9%
Management expects NIM to remain in the 8.5-9% range going forward, with potential for slight improvement from borrowing cost reductions offset by competitive pricing in new vehicle segments. Rating upgrade benefit of 30-40bps should flow through.
MSME growth re-acceleration to 20%+
After cautious stance due to US tariff concerns, management is comfortable with MSME customers finding new markets and expects to grow MSME segment above 20% again, recovering from current ~18% growth rate.
Farm equipment portfolio expansion to ~5%
Currently at 2.3% of AUM, management targets growing farm equipment lending to approximately 5% of overall portfolio, leveraging large rural presence that has been underpenetrated.
HCV growth cautious at single digits
Management is cautious on heavy commercial vehicle growth due to lower infrastructure spending in past two quarters, expecting single-digit growth unless government allocates more infrastructure spend in February 2026 budget.
AUM Growth: 18% budgeted for FY27
Management has budgeted 18% AUM growth for FY27, though Q1 may see lower growth due to watchful stance on geopolitical and monsoon uncertainties. Post-Q1 review will confirm if guidance needs adjustment.
NIM Target: 8.5% for FY27
Net Interest Margin is budgeted at 8.5% for FY27. Management indicated some benefit from the credit rating upgrade (AA+ to AAA) will be passed to customers while some accrues to bottom line.
Cost-to-Income: 26-27% range
Management targets long-term cost-to-income ratio of 26-27%, which Q4 achieved at 25.32%. Current headcount at 76,000 with plans to increase towards 80,000 over next couple of quarters.
MSME Growth: 13-15% for FY27
Management is maintaining cautious stance on MSME lending with 13-15% growth target, as some segments showed impact and US tariff concerns persist. Growth may increase as situation normalizes.