Shriram Finance announces Rs 3570 crore profit for Q3 FY25 and interim dividend of Rs 2.5 per share
Shriram Finance has displayed a remarkable net profit of Rs 3,570 crore for the third quarter end of FY25, growing at 96 percent against the same period a year earlier. Also, most of the growth was Rs 1,489 crore post-tax gain on the sale of a Stake in Shriram Housing Finance Ltd renamed Truhome Finance Ltd. The results were impressive, and Shriram Finance’s stock price fell by 1.6 percent to trade at Rs 521 after the earnings.
The company’s profit after tax (PAT) excluding the one-time gain increased by 14.4 percent to Rs 2,080 crore from Rs 1,818 crore in the same period of last year. In addition, the company’s net interest income (NII) rose 14.3% to Rs 5,823 crore from Rs 5,094 crore in Q3 FY24. Apart from the earnings announcement, Shriram Finance also announced an interim dividend of Rs 2.5 per share (Rs 2.5 per share equivalent to 125 percent), the record date of which is set as January 31, 2025.
One-Time Gain from Stake Sale Drives Profit Surge
One-time post-tax gain of Rs 1,489 crore of sales on Rs 3,929.03 crore divestment of Shriram Housing Finance Ltd by Warburg Pincus in whose sale the sale was made led to Shriram Finance’s strong performance in the quarter. This transaction helped the company’s net profit in the quarter.
Shriram Finance’s core business was up 14.4 percent year on year excluding the one-time gains that rose from Rs 9.68 crore to Rs 11.07 crore in the year ended March 31, 2017.
Dividend Declaration and Future Growth Strategy
Shriram Finance’s stellar financial numbers have been increased by a dividend payment of Rs 2.5 per equity share during the quarter, or 125% for the year. The announcement also fits well with the company’s promise to its shareholders. The subsequent dip in the company’s stock price after the announcement doesn’t take away from the fact the dividend represents confidence in the company’s financial position.
Shriram Finance, looking ahead, is committed to continuing that expansion and growth strategy. From February 1, 2025, to April 30, 2025, the company will sell redeemable non-convertible debentures (NCDs) and subordinated debentures. The company is expected to use the resource mobilization plan to raise funds to move it to the next level of its business expansion and future growth.
Stock Split and Employee Incentives
Shriram Finance had other than strong financial exhibition and determinations of stock structure. From the same quarter owned by the company, there was a stock split from the face value of Rs 10 to Rs 2, becoming effective from January 10, 2025, and making the face value Rs 2.
Under its ESOS 2023 scheme, Shriram Finance also issued 69,513 equity shares. The company has further aligned with its employees by allotting the shares at an exercise price of Rs 193.55 per share thus creating long-term value. The idea behind the ESOS is to give employees incentives to be a part of the company’s growing experience.
