Shriram Finance Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Chintan Joshi - Autonomous Research - Analyst : Hi Good evening. Can I ask on a few different areas? The first question would be that we have seen slippages and gross stage three loans, increasing kind of multiple players in the sector. What would you say is the reason that you haven't seen a familiar deterioration?

Question: Chintan Joshi - Autonomous Research - Analyst : I'm trying to understand why it has improved, while everybody else sees a deterioration. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, SHMF.NS - Q2 2025 Shriram Finance Ltd Earnings Call

Question: Chintan Joshi - Autonomous Research - Analyst : Okay. Secondly, can I check, operating expenses have increased 8% quarter-on-quarter? Is there some reason for that? Any one-offs in there to flag?

Question: Chintan Joshi - Autonomous Research - Analyst : So do you think there shouldn't -- we shouldn't expect similar increases in the next few quarters?

Question: Chintan Joshi - Autonomous Research - Analyst : Some inflation, yeah. And then finally, and a quick one, how do you think asset quality and cost of risk can develop over the next 6 to 12 months? So what do you see in your portfolio that gives you reasons to -- what are the risks that you see and what are the trends that you see in your portfolio?

Question: Chintan Joshi - Autonomous Research - Analyst : Excellent. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, SHMF.NS - Q2 2025 Shriram Finance Ltd Earnings Call

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Thank for opportunity. So a couple of questions.

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Is it better now?

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Yeah. So a couple of questions. The one would be on, again, continue on the stress part. So I mean, you named, like the MFI and a few other segment, but the personal loan segment also is seeing a bit of a rise in stress. Now in this backdrop, your portfolio seems to be doing fine. Now, the thing is that, what kind of growth you are seeing there and if at all any sort of color on future delinquencies in this PL segment? So that is the first question And if you can just help us this kind of growth in this used CV segment or other CV segment. How do you see growth panning out for the rest of the year in that segment? Thanks.

Question: Avinash Singh - Emkay Global Financial Services Ltd - Analyst : Okay. Thank you.

Question: Gopinandan Reddy - PNR Investments - Analyst : Sir, is there any area where we have noticed any pain points that are coming up? I mean, I'm asking this question given the current situation in other companies where everywhere we can see the stress. Is there any area where either practice or anything else where there is an increase in problem areas?

Question: Gopinandan Reddy - PNR Investments - Analyst : I'm asking for our company. Sorry, I'm asking for our company, sir.

Question: Gopinandan Reddy - PNR Investments - Analyst : The second one is not a question, sir. Just an advise, this initially introduction about the Indian economy, all this information world. It is flooded, sir. Everybody is already aware. We better have question and answer in that time. That is my. Thank you.

Question: Shubhranshu Mishra - PhillipCapital Pvt. Ltd. - Analyst : Hi, sir. Good evening. Thanks for the opportunity. Two quick questions. The first one is we've got the number of customers on slide number 13, which is around 90 lakh customers. But I guess that is the outstanding number of customers. How many customers do we bank on a monthly basis? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, SHMF.NS - Q2 2025 Shriram Finance Ltd Earnings Call And of those bank customers, how many customers would have more than two trade lines? Not necessarily with us but bureau report which would be accessing for these customers. So how many of these monthly bank customers will have more than two tradelines? That's my first question, sir. The second one is we have a lot of customers in rural areas and a semi urban area. These are areas where we are seeing certain level of stress, whether in unsecured credit cards or personal loans or MSI or what are the other exposure? It sounds a little out of box, that our customer segment is absolutely immune to this. So wanted your qualitative views on this. And the third part is, sir, if you can just repeat the disbursement mix. So that's just a data keeping question. Thanks.

Question: Shubhranshu Mishra - PhillipCapital Pvt. Ltd. - Analyst : Sir, two wheeler, gold and total, if you can repeat that. It was a little fast for me.

Question: Shubhranshu Mishra - PhillipCapital Pvt. Ltd. - Analyst : And total, sir?

Question: Shubhranshu Mishra - PhillipCapital Pvt. Ltd. - Analyst : Okay sir.

Question: Siddharth - BJ Financial Services - Analyst : Good evening, sir. I'm very glad to connect with you. Thanks for this opportunity. So my main doubt I had was that you would be focusing more on shorten your products like personal loans and two-wheeler for improving the bottom line growth rather than the AUM mix. So I would just like to have your views on the personal loans because it has declined. And on previous quarters, it was mentioned that, this would be the last quarter of decline in personal loan. So could you just let me know your views on that?

Question: Siddharth - BJ Financial Services - Analyst : Okay, sir. And if I may know how better are the margins for personal loan?

Question: Siddharth - BJ Financial Services - Analyst : How the margins are expected to improve for personal loans?

Question: Siddharth - BJ Financial Services - Analyst : All right, sir. Thanks a lot for the opportunity. Thank you.

Question: Chintan Joshi - Autonomous Research - Analyst : Hi, sorry. I thought there would be more questions. Can I come back on your expectations for your net interest margin over the next year? And also, how do you think with the RBI rate cuts, how do you think your margins will behave? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 1:00PM, SHMF.NS - Q2 2025 Shriram Finance Ltd Earnings Call

Question: Chintan Joshi - Autonomous Research - Analyst : So if we get a 50 basis points rate cut, what would your sensitivity be to your NIMs?

Question: Chintan Joshi - Autonomous Research - Analyst : Okay. Thank you.

Question: Kunal Shah - Citigroup Global Markets - Analyst : Yeah. So on yields, have you seen improvement actually in this particular quarter? Maybe is it because of the mix change or something? Because on a calculated basis, it seems to be an improvement

Question: Kunal Shah - Citigroup Global Markets - Analyst : So yields remained same. So there is no maybe and neither in terms of the cost benefit or repricing of fixed rate book and that has happened. Yeah, because cost of funds are just stable. So I just wanted to check on the yield side.

Question: Kunal Shah - Citigroup Global Markets - Analyst : Okay. And secondly, in terms of an update on maybe the interactions with the rating agencies. So maybe in terms of the upgrades or something? Yeah.

Question: Kunal Shah - Citigroup Global Markets - Analyst : Yeah, because it's been quite a consistent performance all through. So not sure in terms of maybe when does that happen with respect to the rating upgrade, yeah. Okay. Okay. Yeah. Thank you.

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : Hi, thanks for the opportunity. My first question is on the gold loan portfolio. Why has the growth come down again in this quarter? It seems to be

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : Okay. As opposed to what before?

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : Okay. And what was the reason for that, sir? I mean, why did you --?

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : Sir. I'm sorry, why is it that they are breaching the LTV norms of 75%? I did not get that.

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : Just to clarify, you mentioned the 75% LTV norm for NBFCs, that's the LTV, when you close the loan?

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : Okay. Understood. And sir, another question on the vehicle finance bit the two large auto NBFCs, we've seen slippages increase quite a bit. It has happened for you also, but I think this increase in slippages a bit lower. Is there something that you're doing on the ground to push your branch people to collect or just to perform better on collections versus what the other auto NBFCs are doing or the trends that they are seeing?

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : But sir, I mean, I think at the start of the call, there was a comment that the government spending has reduced and generally what we see is that, it tends to impact the operators as well. So you're saying despite that, the cash flows and the general load carrying momentum has been good for the operators on the ground, is it?

Question: Raghav Garg - Ambit Capital Private Limited - Analyst : Understood, sir. Thank you. That's all from me.

Question: Gopinandan Reddy - PNR Investments - Analyst : Sir, we have been doing consistent results of late from the time the companies are merged and become Shriram Finance. Is the improvement in consistency in the performance attribute? How much is it attributable to the economic situation that is right now? And how much is it for any changes made in the way we are executing things? What are all the changes that we have done that are giving this consistency? That is what is.

Question: Gopinandan Reddy - PNR Investments - Analyst : Okay. The next question is, as somebody already asked, when it comes to rating agencies, what is it that they are expecting us to improve upon for rating upgrade? Is there anything specific or just we don't know?

Question: Gopinandan Reddy - PNR Investments - Analyst : Okay, Sir. One last question, do you see that the merger benefits is it all played already or we have some more steam left in cross-selling kind of thing?

Question: Gopinandan Reddy - PNR Investments - Analyst : Thank you, sir.