🎲 Q4FY26 Results Expectations 🏦 Shriram Finance Ltd 🔖 The Story So Far Shriram Finance is no longer just a truck financier. It's India's largest retail NBFC - four businesses under one roof: Commercial Vehicle loans, Used Vehicle financing, MSME/SME lending, and Gold loans and now backed by Japan's MUFG Bank, which just closed a ₹39,618 Cr investment (April 8, 2026), the largest FDI in India's NBFC sector ever. Revenue has grown consistently. PAT has been on a sequential recovery path 2,139 Cr → 2,314 Cr → 2,530 Cr over the last three quarters. The direction is clear. Q4FY26 is where the margin recovery thesis gets tested. 🔖 Q4FY26 Estimates Revenue (NII) – 7,241 Cr (+16.1% YoY, range 7,100 to 7,356 Cr) EBITDA– Expanding, NIM recovery the key driver PAT – 2,700 to 2,720 Cr (+26–27% YoY, +7–8% QoQ) EPS – 14.47 (average range 13.17–16.10) AUM – ~3,00,000 to 3,05,000 Cr expected (vs 2,91,709 Cr in Q3FY26, +15% YoY) 🔖 The Real Growth Engine - MUFG Deal This is the structural re-rating event that changes the FY27 and FY28 story entirely. MUFG paid ₹840.93/share for a 20% stake. What MUFG brings - lower cost of borrowing (CoB expected to fall ~100 bps over 2–3 years), AAA funding access, treasury and capital markets expertise, and digital/technology capabilities from its Asia-wide banking network (Indonesia, Thailand, Vietnam, Philippines). Management has upgraded AUM growth guidance to ~19% CAGR over FY26–28E (from 15–17% earlier). Brokerages have raised FY27–28E earnings estimates by 9–10% post the deal close. The MUFG impact on margins is the most underappreciated lever going into Q4 and FY27 🔖 NIM - The One Number That Matters NIM dipped to 8.25% in Q4FY25 (from 9.02% a year earlier) due to excess liquidity on the balance sheet (~310 Cr in Q3FY26). That's what triggered the 9% post-results crash last April. Management has guided NIM recovery to 8.4–8.6% as liquidity normalises. Q3FY26 NIM was ~8.62% - already recovering. Every 10 bps of NIM expansion at Shriram's AUM base (~₹3 Tn) translates to ~₹300 Cr in annualised NII. The math at scale is powerful. 🔖 CV Cycle & Disbursements India's CV upcycle is the core demand driver. South India SME and rural vehicle financing demand remain strong structural tailwinds. Q4 disbursements expected at strong double-digit YoY growth. The company's 3,225-branch network is the distribution moat that no fintech challenger has replicated. Management has historically delivered on disbursement guidance - no reason to expect a break here. 🔖 Asset Quality - The Watch Item GNPA improved to 4.53% in Q3FY26 (from 5.38% in Q3FY25). Collection efficiency hit 98.9%. Q4FY25 saw one-time technical write-off of 2,345 Cr (fully provided for) that cleaned the balance sheet. Management has since guided: no further stress anticipated, credit costs normalising toward ~1.7% in FY27. If GNPA ticks up in Q4, it moves the stock negatively. If it holds or improves, the credit cost re-rating thesis plays out. 🔖 Credit Rating Upgrade - Pure Cost Tailwind India Ratings upgraded Shriram Finance to IND AAA in April 2026. Further upgrades from CRISIL/ICRA expected as MUFG's backing gets fully reflected. Every rating notch means cheaper bonds, lower CP rates, and improved NIM - a compounding benefit that flows through for years. 🔖 New Vehicle Financing - The FY27 Strategic Pivot Shriram has traditionally dominated used CV financing. The new plan for FY27: get deeper into new vehicle financing - a higher-ticket, lower-risk segment. MUFG's global best practices and digital capabilities are directly targeted at this expansion. This is a long-duration story - but Q4 call commentary on execution timelines is worth tracking closely. #shriramfin #vismaya
