26-Oct-2026 08:00:25
JPM on Shriram Fin ; OW, TP cut to Rs 1095 from Rs 1215
Reported a mixed 2Q. While operating metrics came in better vs. JPMe (NII +3% vs. JPMe, PPOP +7% vs. JPMe), Asset Quality (AQ) trends disappointed with provisions up +28% q/q, credit costs at 235bps (+44bps q/q) and GS-2+3 at 11.69% (+9bps q/q). Management’s post earnings commentary confirmed that elevated credit costs could continue for at least another quarter or two (3Q and likely 4Q) before normalizing, indicating SHFL will miss its 2% credit cost guidance for FY27. SHFL highlighted this to be a temporary issue and attributed it to some agri-stress due to deficient rains (El Niño) in certain geographies, worsened by seasonality (2Q is seasonally weak), and affirmed that the deterioration was not broad-based and limited to select products.
SHRIRAM FINANCE LIMITED