Shares of Shriram Finance declined nearly 5 per cent on Monday, even as the non-banking finance company reported a sharp rise in fourth quarter earnings, highlighting investor concerns around asset quality and margin trends.

The stock fell to ₹963.75 on the NSE, trading in the red despite the company posting a 41 per cent y-o-y jump in standalone net profit at ₹3,014 crore for Q4FY26, compared with ₹2,139 crore in the year-ago quarter. The strong profitability was driven by robust growth across key segments including commercial vehicles, passenger vehicles, farm equipment and gold loans.

Brokerages largely described the performance as steady but flagged emerging risks. Motilal Oswal Financial Services said the company delivered a resilient operating performance, supported by steady demand across lending segments and a strong capital base, following MUFG equity infusion. It added that disciplined cost control and stable credit metrics aided profitability, and reiterated a buy rating with a target price of ₹1,200, while cautioning that the evolving macro environment warrants close monitoring.

HDFC Securities termed the results largely in line with estimates, noting that lower operating expenses offset weaker other income. It highlighted steady assets under management growth of 14.8 per cent y-o-y, driven by strong traction in commercial vehicle and gold loans. However, it pointed to a marginal deterioration in asset quality and higher credit costs. The brokerage maintained an add rating, with a revised target price of ₹1,100, citing expectations of growth acceleration supported by fresh capital infusion.

JM Financial also characterised the quarter as mixed, with strong profitability and healthy disbursement momentum offset by softer asset quality trends. It noted that while net interest income growth remained stable, margins saw some compression on a q-o-q basis. The brokerage added that rising stress in segments such as passenger vehicles, MSME and commercial vehicles remains a key monitorable, even as the company’s diversified lending franchise and strengthened balance sheet support long-term growth. It maintained a buy rating with a target price of ₹1,175.

Published on April 27, 2026