Mumbai: Shriram Finance shares plunged more than 6 per cent during Monday's trading session, touching an 11-month low as investors reacted to reduced loan growth guidance and concerns over rising credit costs.
The non-banking financial company (NBFC) emerged as the biggest loser on the Nifty 50 despite reporting better-than-expected quarterly profits.
Shriram Finance Share Price Falls Sharply
Shriram Finance shares declined as much as 6.55 per cent to an intraday low of ₹810.20 on the BSE. At 10:57 am, the stock was trading at ₹829.20, down 4.36 per cent. The stock has corrected approximately 14 per cent over the past month amid concerns about asset quality and future growth.
Company Cuts FY27 AUM Growth Guidance
Shriram Finance reduced its assets under management (AUM) growth forecast for FY27 to 15–17 per cent from the earlier 18 per cent. The company cited weak monsoon conditions, geopolitical uncertainty and financial pressure on borrowers in drought-affected regions. Despite stronger quarterly earnings, the revised outlook raised concerns about future loan growth.
Brokerages Flag Rising Credit Costs
Global brokerage Jefferies warned that credit costs could remain elevated for another one or two quarters due to borrower stress in Maharashtra, Karnataka and Telangana. Motilal Oswal highlighted higher slippages and write-offs, although overall asset quality remained broadly stable. The brokerage noted that AUM increased 17 per cent year-on-year, exceeding expectations.
Rural Stress Remains A Concern
JM Financial flagged rising early delinquencies and deteriorating asset quality indicators linked to drought-like conditions. However, recent equity infusion and AAA credit rating upgrades could provide support to margins.
Shriram Finance's 52-week trading range stands between ₹710.40 and ₹1,153.65. Investors will closely monitor credit costs, loan growth and asset quality trends in the coming quarters.
