Ladies and gentlemen, good day, and Welcome to the Shriram Transport Finance Q2 FY 2025 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Umesh Revankar, Executive Vice Chairman. Thank you, and over to you, sir.
Good evening, friends from India and Asia. A warm welcome to all of you. Greetings also to those who have joined the call from Western part of the world. To present our Q2 FY 2025 earnings call today, I have with me our Managing Director and CEO, Mr. Y.S. Chakravarti, Managing Director and CFO, Mr. Parag Sharma, S. Sunder, Joint Managing Director, and Sanjay Mundra, our Investor Relations Head. It has been a good second quarter of the year for Shriram Finance. Let me first look at how Indian economy has performed. India's economy grew at 6.7% in the April-June quarter, FY 2025, over the growth rate of 8.2% in Q1 of FY 2023-2024.
This figure reflects a deceleration from 7.8% growth seen in the previous quarter of FY 2024 and 8.2% in the corresponding period last year. It was the lowest, slowest expansion in the last five quarter, owing to a sharp slowdown in government spending as the long-awaited general election drove several usual government activities to some halt. On the retail, on inflation, India's retail inflation CPI rose to 5.49, to nine-month high in September, higher than 3.65 in August. This is highest retail inflation rate since 2023, December 2023, when it was 5.69. Food inflation, a persistent challenge, rose 9.24% annually compared to a 5.66 rise in August.
The Wholesale Price Index inflation for June 2024 touched a 16-month high of 3.36%, after scaling 2.61% in the previous month of May 2024. In fact, since February 2024, the WPI inflation has surged from 0.2% to 3.36%, largely on the back of spike in wholesale food inflation and manufacturing inflation turning around from negative to positive. On RBI policy, RBI in its MPC meeting held on October 9, 2024, decided to keep policy repo rate unchanged at 6.5% for the tenth consecutive time. However, RBI changes stance of monetary policy to neutral from withdrawal of accommodation. The MPC has projected real GDP growth for 2024-25 to 7.2%. This number remains unchanged from last projection.
Also, taking various factors into consideration, the CPI inflation for 2024-2025 has been projected at 4.5%, the same as projected in the previous policy. On the rural economy and monsoon, as per the IMD, the Southwest Monsoon this year was 8% over its long-term average. However, the rainfall is likely to continue in October and November, with above normal monsoon rainfall expected. About 35% of the country received excess rainfall and slightly over the half, that is, around 54%, receiving normal rainfall. Despite a slow start, rainfall picked up in pace, helping the farmers with sowing. Overall, farm productivity is expected to be higher, which should help tame year-long rising trend in food inflation.
The good rain in June to September has pushed up Kharif sowing to almost 111 million hectares, against normal acreage of 109.6 million hectares, according to the latest data released on September 27. On GST collection, the GST collection for the month of September grew 6.5% year-on-year, at INR 1.73 lakh crore, while it witnessed a dip compared to INR 1.74 lakh crore in August 2024. On the OEM sales side, this quarter has been soft for automobile industry. Commercial vehicle, total CV sales in Q2 FY 2025 declined by 11% to 2.21 lakh units, against 2.48 lakh units in Q2 FY 2024.
However, the half H1 FY 2025 is declined by 4.2% to 4.4 lakh units as against 4.64 lakh units in H1 FY 2024. Within CVs, M&HCV sales recorded a decline of 12.2% in Q2 FY 2025, and it stands at 82,409 units, as against 93,874 units in Q2 FY 2024. LCV sales too recorded a decline of 11% in Q2 FY 2025, and stands at 1.38 lakh units versus 1.54 lakh units in Q2 FY 2024. Passenger vehicle sales in Q2 FY 2025 recorded a decline of 1.8% in Q2, with 10.55 lakh units being sold against 10.74 lakh units in Q2 FY 2024.
Two-wheeler recorded a growth of 12.6, with sales of 51.79 lakh units in Q2 FY 2025, as against 45.98 lakh units sold in Q2 FY 2024. Three-wheeler registered a growth of 6.6% with 2.09 lakh units sold versus 1.96 lakh units sold in Q2 FY 2024. Tractors marginally declined with 2.08 lakh units as against 2.19 lakh units in Q2 FY 2024. Construction equipment remained flat, with 27,382 units sold versus 27,478 units sold in Q2 FY 2024. During the board meeting, we also had two major decisions by the board.
One, we have gone ahead with the stock split, wherein the face value is now INR 2 instead of INR 10, that will be five times, that is split into five. So, and we also, the board has recommended. Sorry, the board has declared a dividend of 220%, that is INR 22 per share for the first half of the year. Now I request Y. Chakravarti to take us through the operational performance. Thank you.
Thank you, Umesh. Good evening. Good morning, and good evening to all the participants in the call. I welcome all of you to our quarter two financial year 2025 earnings call. I trust you have had the opportunity to review the results and the related investor presentation, which has been posted on the website of the stock exchange. We have registered a disbursement growth of 15.51% year-on-year. Our disbursements in quarter two FY 2025 this year aggregated INR 39,974.09 crore versus INR 34,605.61 crore in quarter two FY 2024.
Our assets under management as on 30th September 2024 registered a growth of 19.94% over Q2 FY 2024, and of 4.11% sequentially. Our AUM stood at INR 2,43,042.55 crore, as against INR 2,02,640.96 crore a year ago, and INR 2,33,443.63 crore in Q1 FY 2025. Our net interest income has registered a growth of 16.37% year-on-year in quarter two FY 2025. We have earned a net interest income of INR 5,606.74 crore in Q2 FY 2025 this year, as compared to INR 4,818.18 crore in Q2 FY 2024.
Our net interest margin was 8.74%, as against 8.93% in Q2 FY 2024, and 8.79% in Q1 FY 2025. Our profit after tax grew by 18.3% in the current quarter, sorry, in Q2 FY 2025 over Q2 FY 2024, and by 4.58% over quarter one FY 2025. We have registered a profit after tax of INR 2,071.26 crore for Q2 FY 2025, as compared to INR 1,750.84 crore in Q2 FY 2024, and INR 1,980.59 crore in quarter one FY 2025.
Our earnings per share for the quarter stood at INR 55.09, as against INR 44.67 in Q2 FY 2024, and INR 52.70 in Q1 FY 2025. On our asset quality, Gross Stage 3 in Q2 FY 2025 stood at 5.32% and Net Stage 3 at 2.64%. These numbers does show an improvement over the corresponding period of 5.79% gross and 2.8% net... in Q2 FY 2024, and 5.39% gross and 2.71% in Q1 FY 2025. Our credit cost for Q2 FY 2025 stood at 1.84%, as against 2.02% for Q2 FY 2024, and 1.87% for Q1 FY 2025.
Our cost-to-income ratio was 27.95% in quarter two FY 2025, as against 27.34% recorded in Q2 FY 2024. Our cost-to-income ratio in quarter one, FY 2025, was 27.45. Regarding our subsidiary, Shriram Housing Finance Limited, as you all know, the board of directors of the company in its meeting held on May 13, 2024, had approved the proposal for disinvestment of the company's entire stake in Shriram Housing Finance Limited. This is a delisted, non-material subsidiary of the company, and in this regard, the company has entered into the share purchase agreement, inter alia, with Mango Crest Investment Limited, an affiliate of Warburg Pincus. The company's investment in Shriram Housing Finance Limited has been classified as non-current assets held for sale and disclosed as discontinued operations in the financial results.
However, Shriram Housing's AUM, as of Q2 FY 2025, exhibited a growth of 40.87% and stands at INR 15,236.26 crore, as against INR 10,816.03 crore in Q2 FY 2024. Their net interest income registered a growth of 15.5% in Q2 FY 2025 over Q2 FY 2024. Net interest income for Q2 FY 2025 was INR 112.46 crore as compared to INR 97.43 crore in Q2 FY 2024. Shriram Housing Finance registered a profit after tax growth of 36.87% in Q2 FY 2025 over Q2 FY 2024. Tax for the quarter of this year was INR 66 crore as compared to INR 48.22 crore.
The EPS stood at INR 1.83 against INR 1.48 in Q2 FY 2024. Shriram Housing's Gross Stage 3 for Q2 FY 2025 stood at 1.22%, and their Net Stage 3 came in at 0.93%. In comparison, these numbers were 1.08% on gross basis and 0.83% on net basis in Q2 FY 2024. I shall now request our Managing Director and CFO, Mr. Parag Sharma, to inform you about our resource-raising activities, after which our Joint Managing Director, Mr. S. Sunder, will brief you about accounting and regulatory aspects. Thank you.
Hello, everyone. I'm Parag. The total debt outstanding as of September 2024 is INR 207,820 crore, broken up into term loans of INR 51,123 crore, which is 24% of our liability. Securitization is INR 34,467 crore, which is 16% of our liability. Our external commercial borrowing, both from the loan and the bond route is INR 31,752 crore, which is 15% of our liability. Domestic capital market bonds, which constitute INR 40,281 crore, which is 19% of our liability. And retail deposits, which is INR 50,196 crore, which is 24% of our liability. So well-diversified liability mix, and that mix has been in line with the previous quarter and also as of March 2024.
We also do direct assignment transaction for some of our asset classes, and that outstanding is close to around INR 3,000 crore, which will be an off-balance sheet item. The cost of liabilities is 8.97, one basis point up from the June 2024 quarter, and slightly down from the March 2024 number. The leverage ratio stands at 3.99, which was 3.79 in June, and as of March, it was 3.83. The liquidity coverage ratio is healthy at 234. June, it was 225.19%.
We always maintain more than three months of liability repayment into liquid assets, and that is slightly more than INR 17,000 crore, and three months' liability is around INR 16,700 crore, which includes the retail liabilities also. Incremental cost of fund has been in line and slightly lower than the liabilities cost on the balance sheet. So that indicates that there could be we can maintain the liability cost of debt or maybe slightly can improve over a period of time. The ALM buckets continue to be positive, and up to six months, the cumulative surplus will be around more than INR 35,000 crore, and up to one year will be around INR 50,000 crore.
The funds mobilized this quarter has been, I'll say, strong, and securitization and direct assignment transaction has been in excess of INR 10,000 crores. We have also done ... and ECB bond, which was concluded during end of September, which was INR 4,000 crore. And bank borrowing continues also to be strong, more than INR 5,000 crore borrowed through the bank loan route, and NCDs have been around INR 7,000 crore. Now, with this, I hand over to Sunder for his comment on this.
Thank you, Parag. The employee count as on 30th September was 77,764, as against 75,813 in June quarter, a net increase of 1,951 employees. Then some data points on the ECL, the Stage 1 PD was 9.06%, and the Stage 2 PD was 20.98%, and the LGD stood at 38.59. Coming to the disbursement segment-wise, the CV disbursements were INR 15,400 crore. Passenger vehicles was INR 7,595 crores, construction equipment was INR 2,267 crores, farm equipment was INR 899 crores, MSME was INR 6,875 crores, two-wheeler was INR 2,555 crore, gold was INR 2,697 crores, and personal loan was INR 2,081 crores, totaling to INR 39,974 crores. With this, we'll just open up for the questions, and we'll be happy to answer your questions. Thanks.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Chintan Joshi from Autonomous. Please go ahead.
Hi, good evening. Can I ask on a few different areas? The first question would be that we are seeing slippages and Gross Stage 3 loans increasing kind of for multiple players in the sector. What would you say is the reason that you haven't seen a similar deterioration?
The slippage has actually improved as a percentage.
Yeah, just want to understand why it has improved, because everybody else is seeing a deterioration?
Okay. Yeah. As a industry, if you look at, there are deterioration in certain geographies and certain segments. Mostly, the, as RJ has been talking, unsecured loans, MFI loans, and that too in certain geography, there has been little higher slippage. I feel it is basically the local economic activity being little weaker. That could be the reason.
Okay. Secondly, can I check, operating expenses have increased 8% quarter-on-quarter. Is there some reason for that, any one-offs in there to flag?
Well, there was some fees paid in the current quarter due to increased two-wheeler and other loans wherein which was sourced through the direct sourcing agents. And there were also some costs incurred on our branding front. So apart from this, it was a normal increase.
So do you think there will? It shouldn't. We shouldn't expect similar increases in the next few quarters?
Yeah. It will not be to this level, but there will be some increase, no doubts.
Some inflation, yeah. And then finally, and a quick one, you know, how do you think asset quality and cost of risk trends develop over the next six to 12 months? What is, you know, what do you see in your portfolio that gives you reasons to, you know, what are the risks that you see, and what are the trends that you see in your portfolio?
We don't really see any further, you know, what called, there'll be improvement in our asset quality. There may not be anything adverse now, because the economic activity being very strong, the foundation of the country and is very strong, and government spend on infrastructure is likely to improve in the next two quarters. That will help the economic activity to improve, and the festive period with good monsoon and good, a good Kharif crop and better MSP price, all are likely to help be very positive for next two quarters. I don't really see any possibility of deterioration. So we are targeting to improve our Stage 3 to around 5% level.
Excellent. Thank you.
Thank you. The next question is from the line of Avinash Singh from Emkay Global. Please go ahead.
Hi, thanks for the opportunity, so couple of questions,
Sorry to interrupt, sir. Could you come a bit close to your handset?
Is it better now?
Yes, sir, go ahead.
Yeah. So couple of questions. The one would be on, you know, again, continuing on the stress part. So I mean, you named, I mean, like, the MFI and, a few other segments, but the personal loan segment also is seeing a bit of a rise, a rise in stress. Now, in this backdrop, your portfolio seems to be doing fine. Now, the thing is that, I mean, what kind of a growth you are seeing there, and if at all, any sort of a color on future, you know, delinquencies in this PL segment? So that is the first question. And, if you can just help, us with kind of, growth in this, used CV segment or other CV segment, how do you see growth panning out for the rest of the year in that segment? Thanks.
Hi, this is Chakravarti here. On the PL side, the most of the stress that is visible in the market today is in your BNPL and the small ticket personal loan space. So even within the industry players where you have a larger ticket personal loans, basically for prime and super prime segment of customers, the stress is there, the portfolio is performing well. And as far as Shriram Finance is concerned, 97%-98% of my disbursement goes to my existing customer. Either he's a two-wheeler customer who has finished 75% of his loan tenure, or an ex-personal loan customer who has finished repayment of his personal loan and coming for a second loan.
So we don't see, I mean, the quality of the portfolio is not the reason why we have slowed down, but it is also just to give a comfort to. I mean, so since there is a lot of concern around on portfolios, on personal loans, we have actually, what we did was, we have further tightened our criteria for giving a loan to our existing customer, and that's one of the reasons why you see that slowdown. But going forward, we will wait for a couple of quarters before the industry and regulator gets comfort, and then we will increase this portfolio. As far as growth in CV is concerned, I think we should grow our CV portfolio anywhere from next two quarters should grow at 17%-18% comfortably.
Okay, thank you.
Thank you. The next question is from the line of Gopinanthan Reddy from PNR Investments. Please go ahead.
Sir, is there any area where we have noticed any pain points that are coming up? I mean, I'm asking this question given the current situation in other companies where everywhere we can see the stress. Is there any area where either tractors or anything else, where there is an increase in problem space, problem areas?
So none of the asset-backed loans that we don't see any issues. And as I was telling you, there is a geography-specific and segment-specific challenges. See, one of the area which we is a little, where you see the challenges are where people are over-leveraged. That individuals are over-leveraged, and there is excessive lending to them. That is in few locations there are challenges.
I'm asking for our company. Sorry, I'm asking for our company, sir.
Our company, no. We don't see any-
Any area. Yeah, okay. Fine, sir. The second one is not a question, sir, just an advice. This, in initial introduction about the Indian economy, all these things, with this information world, it is flooded, sir. Everybody is already aware. We better have question and answers, in that time. That is my... Thank you.
Good. Thank you.
Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead.
Hi, sir. Good evening. Thanks for the opportunity. Two quick questions. The first one is, we've got the number of customers on slide number 13, which is around ninety lakh customers, but I guess that is the outstanding number of customers. How many customers do we bank on a monthly basis? And of those bank customers, how many customers would have more than two trade lines? Not necessarily with us, but a bureau report which would be accessing for these customers. So how many of these monthly bank customers would have more than two trade lines? That's my first question, sir.
The second one is, given the fact that we have a lot of customers in rural areas and semi-urban areas, these are you know certain level of stress, whether in unsecured credit cards or personal loans or MFI or one of the other exposures. It sounds a little out of whack that our customer segment is absolutely immune to this. So wanted your qualitative views on this. And the third part is, sir, if you can just repeat the disbursement mix, sir. That's just a data keeping question. Thanks.
Okay. As far as the disbursement, sir, I mean, I'll just repeat it. Commercial vehicles, INR 15,004 crores. Passenger vehicles, INR 7,595 crores. Construction equipment, INR 2,267 crore. Farm equipment, INR 899 crores. MSME, INR 6,876 crores. Two-wheelers, INR 2,555 crores. Gold, INR 2,697 crores. Personal loans, INR 2,081 crores, totaling to INR 39,974 crores. And as regards to your first question regarding that, overheads and all, so that I would suggest that you contact Mr. Mundra, offline, so he will be able to help you out. Again?
Sir, month, sir, two-wheeler, gold, and total, if you can repeat, sir. It was a little fast for me.
Two-Wheeler was 2,555 crore. Gold, 2,697. Personal Loan, 2,081.
Total, sir?
INR 39,974 crore.
Okay, sir.
Yeah. Thank you.
Thank you. The next question is from the line of Siddharth from VK Financial Services. Please go ahead.
Good evening, sir. I'm very glad to connect with you. Thanks for this opportunity. So my main doubt I had was, you know, that you would be focusing more on short-term products like personal loans and two-wheeler for, you know, improving the bottom line growth rather than the, you know, AUM mix. So I would just like to have your, you know, views on the personal loans, because it has declined, and on previous quarters, it was mentioned that, you know, this would be the last quarter of decline in personal loan, so could you just let me know your views on that?
No, no, as I said, as I told you, no, once we are able to give the comfort to the market and the regulator that our portfolio is doing well, we will grow. So this two quarters, we should improve the disbursement.
Okay, sir. So, if I may know, how better are the margins for personal loans, sir?
Sorry, how? Margins.
How the margins are expected to improve for personal loans?
So, no, no, no. See, margins, personal loan is what, personal loan portfolio, entire portfolio is about 3%. So you, even if I improve the margin by 100% also, it is not going to create a big dent on the overall. But as a standalone thing, I think we should be able to manage our maintain our average yield around we have our products going from 12% up to 27%-28%. So basically, the mix will remain the same.
Right, okay. All right, sir, thank you a lot for the opportunity. Thank you.
Thank you. A reminder to all participants that you may press star and one to ask a question. The next question is from the line of Chintan Joshi from Autonomous. Please go ahead.
Hi. Sorry, I thought there would be more questions. Can I come back on your expectations for your net interest margin over the next year? And also, how do you think, you know, with the RBI rate cuts, how do you think your margins will behave?
Okay. Net interest margin should remain at present level. As far as the RBI rate cut and the, no, that is something very subjective, so it depends upon when exactly RBI will look for a rate cut. So I, we as a, as a-
What would your sensitivity be?
Unlikely to be before February. So, only then we will be able to, you know, address that. So I don't really see any immediate improvement in our funding cost.
Okay. And if we get a fifty basis point rate cut, what would your sensitivity be to your NIMs?
See, obviously, when there is a rate cut, when the banks start passing on that benefit to us, that benefit will accrue to us. So it will come at a lag, so we can't be, you know, telling it in advance.
Okay. Thank you.
Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead.
Yeah. So on yields, have we seen improvement actually in this particular quarter? Maybe is it because of the mix change or something? Because on a calculated basis, it seems to be an improvement.
No, see, there, see, I don't think there's any improvement. It's more or less y ield remains same, Kunal.
More or less same, Kunal.
Okay. So It has remained same, so there is no maybe, neither in terms of the pass-on benefit or repricing of fixed rate book, that has happened, yeah. Because cost of funds are just stable, so just wanted to check on the yield side.
No, it's more or less same. Not significant.
Okay. And, secondly, in terms of an update, on maybe the interactions with the rating agencies. Yeah. So maybe in terms of the upgrades or something, yeah.
Right. Yeah, I think the dialogue is continuously on with them. We are emphatic upon the improvement in asset quality and diversity of our mix on assets and liabilities both. But I think, yeah, we are, as of now, I think we'll keep our fingers crossed and keep the radar on. Let us see when we are able to prevail upon them.
Yeah, because it's been quite a consistent performance all through, so not sure in terms of maybe when does that happen with respect to the rating upgrade, yeah. Okay. Okay, yeah. Thank you.
Thank you. The next question is from the line of Raghav Garg from Ambit Capital. Please go ahead.
Hi, yeah, thanks for the opportunity. My first question is on the gold loan portfolio. Why has the growth come down again in this quarter? It seems to be at 12% Y-O-Y, and there seems to be a decline quarter-on-quarter.
Primarily, it's come down because we have reduced our LTVs on gold to about 60%-65%. So that's one of the primary reasons why the disbursement has come down.
Okay. As opposed to what before, sixty-
About 70%-73%.
Okay, and what was the reason for that, sir? I mean, why did you decide to-
What's happening is, so since most of the gold is a bullet payment, that is, principal and interest to be repaid, what's happening is, they are breaching the 75% LTV norms within a short period of time. So. And we are actually providing, the moment it breaches the 75% LTV norm, we are actually classifying it as an NPA, but the regulators advised us that since a lot of cases it is happening, they have advised us it is better to reduce rather than provide it. So, we have done that.
Sir, I'm sorry. Why is it that they are breaching the LTV norms of 75%? I did not get that.
See, basically, your exit LTV, your LTV, the norm is 75% of the loan to value of the gold.
Mm-hmm.
At an exit LTV. That is an exit LTV that is prescribed, not entry. So your accumulated interest plus principal cannot cross 75%.
Understood.
With time, and if it crosses, you actually keep, you need to classify it as an NPA and call the customer or try to auction off the gold. So since it is happening, and because we, your, LTV is about, at 72%, and it is touching, 75% quite fast, the regulator advised, "Why don't you actually, instead of providing, why don't you, reduce the LTV?" So we took the advice and reduced.
Sir, you mentioned, just to clarify, you mentioned the 75 LTV norm for NBFC, that's the exit LTV when you close the loan, or not?
No, no, even for banks. It's the same for NBFCs and banks.
Okay. Understood. And sir, another question on the vehicle finance bit. For the other two large auto NBFCs, we've seen slippages increase quite a bit. It has happened for you also, but I think the increase in slippage is a bit lower. Is there something that you're doing on the ground to push your branch people to collect, you know, or just to perform better on collections versus what the other auto NBFCs are doing or, or the trends that they are seeing?
I mean, let me put it this way: I don't know about the other NBFCs, but I think majority of the portfolio would be new vehicles, whereas for us, majority of the portfolio is used vehicles, one. Two, basically, what we see on the ground is basically improved utilization of the vehicle, because lesser turnaround time and improved load. So typically, the per day running kilometers has increased for most of these vehicles. So, cash flow also has improved, so that is also one of the reasons why we are able to manage the delinquency that is there, like, at these numbers.
But sir, I mean, I think at the start of the call, there was a comment that the government spending has reduced, and generally what we see is that, you know, it tends to impact the operators as well. So you're saying despite that, the cash flows and, you know, the general load carrying momentum has been good for the operators on the ground, is it?
No, no, no. See, the comment was in that when we are talking about the new vehicle sales, right? M&HCVs, particularly for medium and heavy vehicles, and also exit LTVs, but that is for new vehicle sales. I think the one thing, one factor that is going on positive is, for used vehicles, there is today new capacity. Excess capacity is not coming into the market. The existing capacity is being utilized better. And in fact, used vehicle prices are holding very steady.
Thank you, sir.
What happens is, when the government is spending on infrastructure, the additional demand comes for new vehicle sales. And therefore, the additional demand did not come because government has spent less. But otherwise, the existing portfolio, what you call, the customers have sufficient business, and it is quite profitable. Therefore, the quality also is improving, being better.
Understood, sir. Thank you. That's all from me.
Thank you. The next question is from the line of Gopinanthan Reddy from PNR Investments. Please go ahead.
Sir, we have been giving consistent results of late, from the time the companies are merged and become Shriram Finance. Is it, is the improvement in consistency in the performance attribute? How much is it attributable to the economy, economic situation that is right now? And how much is it for any changes made in the way we are executing things? What are all the changes that we have done that giving this consistency? That is what it is.
See, basically, when economy is doing good, the all the parameters of any company which is dependent on economy will do well. So that is a natural, what you call, linkage you can establish. Otherwise, company has been there, as an entity for nearly fifty years, the financial Shriram Finance. So we have our own DNA, our own strong culture, and that has been helping us to understand the environment, understand the customer, and respond to the customer much better. So we have been improving over the period, and we will continue to improve.
Okay. The next question is, somebody already asked, when it comes to rating agencies, what is it that they are expecting us to improve upon for rating upgrade? Is there anything specific or it's just we don't know?
There's nothing specific. They would like to see overall progress. Now, they waited for one year to complete post-merger, whether this merger will go through smoothly and efficiently, which we have now demonstrated. Probably, they would also like to see this macroeconomic advantage to continue for some more time before they consent to further improvement.
Okay. Sir, one last question: Do you see that the merger benefits is all played already or we have some more steam left in cross-selling kind of things?
See, we have not reached all the branches with the products. The MSME Gold has not reached to all the geography, all the branches. There is some more scope for improvement.
Okay. Thank you. That's all from my side.
Okay.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of our Q&A session. I now hand the conference over to Mr. Umesh Revankar, Executive Chairman, for closing comments.
Thank you all for joining. As you know, second quarter is normally a tricky quarter because excess rain or shortfall in rain makes big difference in Indian economy and the overall credit demand. We are with good rainfall and good output in the rural agri output. I think we can expect a better half in the October to March. So with the hope that things will further improve, credit demand will further improve, we would like to say bye and catch up next time. Thank you very much.
Thank you. On behalf of Shriram Finance Limited, that concludes this conference. Thanks for joining us. You may now disconnect your lines.
Thank you.