Shriram Finance Confident Of Sustaining 15% Growth Rate In Near Future

Shriram Finance is confident that its overall growth momentum of 15% will continue for a "little longer" on the back of multiple factors, including fewer asset quality concerns and opportunities in the personal loan sector, according to the company’s Executive Vice Chairman Umesh Revankar.

“Normally, we don't give guidance on higher growth. Our long-term guidance or medium-term guidance remains at 15% only because we cannot predict the long-term. But we are quite confident that the growth will sustain for a little longer time,” he told NDTV Profit. 

The top executive also expected higher growth in Q4 for the company on account of it being ‘busier.’

“We expect a higher growth in Q4. Normally, Q4 looks busier. Every year, it is normally higher, and last year too, the base was larger. We do expect a bigger business,” he said.

Commenting on Shriram Finance’s better asset quality than peers, Revankar mentioned that most of the business of the NBFC is asset-backed and the company is not present in the unsecured loan front.

“Our asset-backed lending looks to be comfortable and safe. So most of our business is asset-backed, which is asset creation or asset-backed. So that's doing well,” he said. 

“What has been a little challenging is the unsecured loan, where the loan would have gone to pure consumption or maybe some other activity, not for productive purposes. That is where there could probably be some weakness where we don't have a presence,” the Shriram Finance VC added.

Talking about the growth opportunities in the personal loan space, which the company has recently delved into, Revankar explained that Shriram Finance only extends them to its existing customers requiring a top-up.

“See, PL (personal loan) is nothing but our existing customer wanting some additional loan. After doing analytics of our existing customer database, we offer them additional loans. So we normally don't go after the market customer,” he said.

“That means the customer is curated, and the underwriting is done with the knowledge of customers, the requirement, and also his ability to earn and pay. So the growth in personal loans will depend upon the overall growth in our loan book,” Revankar added.

Shares of Shriram Finance Ltd. were trading 1.09% higher at Rs 517.25 on the NSE, while the benchmark index Nifty 50 was 0.7% higher, as of 11:40 a.m..