Shriram Finance sees softer loan growth as weak monsoon lifts costs

Gold, personal loans, two-wheeler, and MSME loans saw higher delinquencies.

Shriram Finance expects softer loan growth from initial estimates due to the Middle East conflict and a weak monsoon season, said CreditSights by Fitch Solutions.

The Indian non-bank financial company’s profitability and capitalisation is expected to remain solid, CreditSights said in an October 2026 report.

Credit costs are expected to rise during the fiscal year. A weak monsoon drove credit costs to rise by 44 basis points in Q2 FY2027. Gold, personal loans, two-wheelers and micro, small, and medium enterprises (MSMEs) saw higher delinquencies, the report said.

Shriram Finance’s net profit rose by 59.5% year-on-year (YoY) to INR71b in the first six months of FY2027. Loan growth rose 4.9%, led by MSMEs, gold, and personal loans.

MUFG’s capital infusion and lower funding costs in Q2 helped expand Shriram Finance’s net interest margin (NIM) to 10.22%, a 155 basis point rise, according to CreditSights.