India's Shriram Finance drops most in 4-mths on elevated Q4 credit costs

Piramal Enterprises

28/04/2023 09:15

** Shares of Shriram Finance Ltd  SHMF.NS  fall as much as
6.9% to 1,309 rupees, their steepest intraday pct drop since
Dec. 29
    ** March quarter profit for the non-banking finance co fell
26.4% Q/Q, profit rose ~20% Y/Y 
    ** Motilal Oswal says credit costs for the quarter were
elevated to 2.6% Q/Q by ~50 bps; stress testing of portfolio led
to one-time credit cost of 2.95 bln rupees     
    ** Cuts FY24 and FY25 estimates by 6% each, factoring higher
effective tax rate of ~27%
    ** Macquarie Research cites concerns on deliverability of 3%
return on assets and sustainability of credit costs levels
    ** Adds, valuations look cheap; Piramal Enterprise and TPG
could look to sell stake
    ** About 2.4 mln shares change hands by 1:24 p.m. IST, 3.8x
the 30-day avg - Refinitiv Data
        
($1 = 81.8030 Indian rupees)

 (Reporting by Priya Sagar in Bengaluru)
 ((Priya.Sagar@thomsonreuters.com))