Shriram Finance Oct-24
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Questions and Answers

How much of the liability repayment is maintained in liquid assets?

  • Slightly more than three months (correct)
  • Six months
  • Exactly three months
  • Less than three months

    • What is the approximate amount for three months of liabilities mentioned?

  • Rs. 15,000 crores
  • Rs. 17,000 crores
  • Rs. 18,500 crores
  • Rs. 16,700 crores (correct)

    • What does the incremental cost of funds indicate in relation to liability costs?

  • It is in line and slightly lower than the liabilities cost. (correct)
  • It is significantly higher than the balance sheet liabilities cost.
  • It has no relation to the liabilities cost.
  • It shows a major increase over time.

    • What is the cumulative surplus expected to be up to six months?

    <p>More than 35,000 crores</p> Signup and view all the answers

    What will the cumulative surplus be approximately up to one year?

    <p>Around 50,000 crores</p> Signup and view all the answers

    What segment of loans is currently facing most stress in the market?

    <p>BNPL and small ticket personal loans</p> Signup and view all the answers

    What is the performance level of the portfolio for larger ticket personal loans?

    <p>It is performing well.</p> Signup and view all the answers

    What percentage of Shriram Finance's disbursement goes to existing customers?

    <p>97%-98%</p> Signup and view all the answers

    Which customer segment is primarily targeted by larger ticket personal loans?

    <p>Prime and super prime customers</p> Signup and view all the answers

    What future growth is being specifically inquired about?

    <p>Growth in the CV segment</p> Signup and view all the answers

    In the context of loan disbursement, what strategy is highlighted by Chakravarti?

    <p>Focusing on existing customers.</p> Signup and view all the answers

    Which type of loans are particularly noted for having market stress?

    <p>Buy Now Pay Later (BNPL) loans</p> Signup and view all the answers

    What was the registered profit after tax for Q2FY25?

    <p>Rs. 2,071.26 crores</p> Signup and view all the answers

    How is the overall market described in relation to personal loans?

    <p>The market shows visible stress.</p> Signup and view all the answers

    How much did the earnings per share change from Q2FY24 to Q2FY25?

    <p>Increased by Rs. 6.39</p> Signup and view all the answers

    What was the gross stage 3 asset quality percentage in Q2FY25?

    <p>5.32%</p> Signup and view all the answers

    What was the trend in credit cost from Q2FY24 to Q2FY25?

    <p>Decreased to 1.84%</p> Signup and view all the answers

    How did the cost to income ratio in Q2FY25 compare to Q1FY25?

    <p>It worsened to 27.95%</p> Signup and view all the answers

    What LTV threshold triggers the classification of a case as an NPA?

    <p>75%</p> Signup and view all the answers

    What approach did the regulator advise regarding cases breaching the LTV norm?

    <p>Reduce rather than provide</p> Signup and view all the answers

    What does the term 'exit LTV' refer to in the context of the discussion?

    <p>Loan-to-value ratio at the end of the term</p> Signup and view all the answers

    What needs to happen if accumulated interest plus principal exceeds 75% LTV?

    <p>Classify it as an NPA</p> Signup and view all the answers

    What action might be taken if a loan is classified as an NPA?

    <p>Auction off the gold</p> Signup and view all the answers

    Why might a borrower breach the 75% LTV norm?

    <p>All of the above</p> Signup and view all the answers

    What did Y.S. Chakravarti clarify about the LTV norm?

    <p>It is based on the exit value of the loan</p> Signup and view all the answers

    Who expressed confusion about the breach of the LTV norms?

    <p>Raghav Garg</p> Signup and view all the answers

    What does Umesh Revankar suggest can significantly impact the Indian economy during the second quarter?

    <p>Excess rain or shortfall in rain</p> Signup and view all the answers

    What does Umesh Revankar indicate could lead to better economic conditions from October to March?

    <p>Good rainfall and strong agricultural output</p> Signup and view all the answers

    What is considered a 'tricky quarter' in Umesh Revankar's statement?

    <p>April to June</p> Signup and view all the answers

    What role does Umesh Revankar hold in the conference?

    <p>Chairman</p> Signup and view all the answers

    Which period is discussed as potentially showing improvement due to favorable conditions?

    <p>October to March</p> Signup and view all the answers

    What factor is not mentioned as a reason for potential economic changes in Umesh Revankar's closing comments?

    <p>Urban development</p> Signup and view all the answers

    In which sector does Umesh Revankar suggest strong performance could lead to economic improvement?

    <p>Agriculture</p> Signup and view all the answers

    Umesh Revankar describes the second quarter as tricky due to its impact on what aspect of the economy?

    <p>Credit demand</p> Signup and view all the answers

    What aspect of the company's culture is emphasized as beneficial in understanding customers?

    <p>A unique DNA and strong culture</p> Signup and view all the answers

    What do rating agencies expect to see for a rating upgrade after the merger?

    <p>Demonstrated efficiency post-merger</p> Signup and view all the answers

    What has the company shown after completing the merger that affects rating agencies' likelihood of an upgrade?

    <p>Demonstration of smooth and efficient operations</p> Signup and view all the answers

    What aspect is mentioned as still having potential for improvement within the company?

    <p>Cross-selling opportunities across all branches</p> Signup and view all the answers

    How long did the rating agencies wait after the merger to assess the company's progress?

    <p>One year</p> Signup and view all the answers

    What type of advantage do the rating agencies want to observe before considering an upgrade?

    <p>Macroeconomic stability</p> Signup and view all the answers

    Which product is mentioned as not reaching all branches yet?

    <p>MSME Gold</p> Signup and view all the answers

    What is suggested by Umesh Revankar regarding the future scope for the company?

    <p>Additional opportunities for product expansion</p> Signup and view all the answers

    Study Notes

    Shriram Finance Limited Q2 FY25 Earnings Conference Call

    • Date: October 25, 2024
    • Management: Umesh Revankar (Executive Vice Chairman), Y S Chakravarti (MD & CEO), Parag Sharma (Managing Director & CFO), S Sunder (Joint Managing Director), Sanjay Kumar Mundra (Investor Relationship Head)
    • Indian Economy Growth: 6.7% in Q1 FY25, down from 8.2% in Q1 FY23-24, lowest in 5 quarters, due to slowed government spending.
    • Inflation: Retail inflation (CPI) rose to 5.49% in September (9-month high), up from 3.65% in August, and 5.69% in December 2023; Food inflation increased to 9.24% year-on-year, up from 5.66% in August; Wholesale Price Index (WPI) also saw an increase to 16-month high of 3.36% in June 2024.
    • Monsoon: Southwest monsoon rainfall was 8% above average, encouraging farm productivity.
    • OEM Sales: Commercial Vehicle (CV) sales declined by 11% (2.21 lakhs) in Q2 FY25, and in H1 FY25 by 4.2%. Passenger Vehicle (PV) sales declined by 1.8%,
    • Disbursements: 15.51% year-on-year growth in Q2 FY25, totaling Rs. 39,974.09 crores; Asset Under Management (AUM) growth of 19.94% in Q2 FY24, and 4.11% sequentially.
    • Asset Quality: Gross stage 3 stood at 5.32% and net stage 3 at 2.64% in Q2 FY25; Cost to income ratio was 27.95% in Q2FY25 compared to 27.34% recorded in Q2FY24.
    • Earnings Per Share: Rs.55.09 in Q2 FY25 against Rs. 44.67 in Q2 FY24, and Rs.52.70 in Q1 FY25
    • Profit after tax: 18.30% growth in Q2FY25 compared to Q2FY24, 4.58% growth over Q1 FY25.
    • Net Interest Income: 16.37% growth in net interest income in Q2 FY25; Net interest margin was 8.74% in Q2 FY25.
    • Shriram Housing Finance: AUM growth of 40.87% in Q2 FY25; Net Interest Income growth of 15.50%.
    • Employee Count: 77,764 as of September 30, 2024

    Key Takeaways

    • Improving asset quality and diversified revenue streams are key success factors
    • Emphasis on sustained growth despite economic headwinds
    • Focus on operational efficiency and cost optimization was observed

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    Shriram Finance Limited Q2 FY25 Earnings Conference Call PDF

    Description

    Test your knowledge on key financial concepts related to liability repayments, market stress in loans, and performance metrics of personal loan portfolios. This quiz covers various aspects such as liquidity, customer segments, and expected growth in financial services. Challenge yourself with questions that delve into the financial strategies of lending institutions.

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