India`s Shriram Finance posts higher Q2 profit on strong loan demand
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India's Shriram Finance reported an 18% jump in second-quarter profit on Friday, propelled by robust growth in its key lending segments.
The company reported a standalone net profit of 20.71 billion rupees ($246.4 million) for the quarter ended Sept. 30, compared to 17.51 billion rupees a year ago.
The standalone results do not include results of Shriram Automall India and Shriram Housing Finance, the latter of which the company said was being "held for sale" in its earnings statement.
Demand for commercial vehicles, along with its small business credit segments heavily boosted the earnings, although all but one segment - personal loans - registered growth.
Commercial vehicle loans swelled by 14% to 1.12 trillion rupees, while loans to medium and small industries grew 51.6%.
These two segments accounted for nearly 60% of its total assets under management, which grew about 20% to 2.43 trillion rupees.
The company's net interest income, the difference between interest earned on loans given out and paid on funds borrowed, rose 16.4% to 56.07 billion rupees, beating analysts' expectation of 54.78 billion rupees as per estimates compiled by LSEG.
Its borrowing sources include loans from banks, the bonds it issues, and fixed deposits.
Shriram Finance also announced a 1-to-5 stock split, along with a dividend of 22 rupees per share.
Shares of the company ended 4.7% lower ahead of the results, amid a broadly weak market.
($1 = 84.0580 Indian rupees)
