(Reuters) -India’s Shriram Finance posted a rise in first quarter profit on Friday, helped by healthy loan growth.
The non-banking finance company (NBFC) reported an 8.8% year-on-year rise in standalone profit at 21.56 billion rupees ($249.01 million) for the quarter ended June 30.
However, this was slightly below the analysts’ average estimate of 21.91 billion rupees, according to data compiled by LSEG.
Analysts said that while the broader non-banking lending sector was hit by high funding costs, Shriram Finance saw loan growth across segments, with relatively stronger traction in small business and two-wheeler loan portfolios.
Commercial vehicle loans increased by 12.3%, while loans to medium and small businesses grew by 35%. Loans from the passenger vehicle and two-wheelers segments rose about 23% each.
These four segments account for nearly 85% of the company’s total assets under management (AUM), which rose 16.6% to 2.72 trillion rupees in the quarter.
Shriram Finance’s net interest income – the difference between interest earned on loans given out and paid on borrowings – rose 12.6% to 60.26 billion rupees, beating analysts’ expectation of 59.41 billion rupees.
Its gross stage 3 assets, or loans which have been overdue for more than 90 days, declined 1.7% year-on-year.
Shriram Finance shares pared some losses to trade down 3% after the results, having fallen 4.4% earlier in the session.
($1 = 86.5830 Indian rupees)
(Reporting by Aleef Jahan and Nishit Navin in Bengaluru; Editing by Eileen Soreng)
