Shriram Finance Shares Hit 11-Month Low After Lowering Loan Growth Forecast

Shares of India's Shriram Finance fell to their lowest level in roughly 11 months during Monday's trading session on October 26 after the non-bank lender reduced its forecast for growth in loans under management and warned that credit costs could rise.

The stock touched about 810.20 rupees in intraday trading, according to Reuters reporting carried by MarketScreener. The report described a decline of about 6%, while other market reports described a larger intraday fall. The figure is not a closing price.

Management lowered its forecast for fiscal 2027 growth in assets under management to 15% to 17%, from 18% previously. Assets under management are the outstanding loans and other financing assets overseen by the company. A lower growth target indicates that management expects the lending portfolio to expand more slowly than it had earlier projected.

The revised outlook reflects concerns about erratic or deficient monsoon rainfall, pressure on rural borrowers and wider geopolitical uncertainty. Analysts cited by the financial publications pointed to possible stress among borrowers in drought-affected parts of Maharashtra, Karnataka and Telangana. Higher missed repayments can increase the amount lenders must set aside for potential losses, known as credit costs.

The cautious guidance overshadowed an increase of nearly 60% in consolidated profit for the September quarter. The strong results therefore did not prevent investors from marking down the shares in response to the outlook.

Several brokerages maintained positive longer-term ratings but lowered their price targets or warned that credit costs could remain elevated for one or two quarters. Those forecasts are analysts' assessments, not established future outcomes. The next indicators to watch are the company's loan growth, early-stage delinquencies and whether conditions for rural borrowers improve.