Growth drivers
What explains the management’s optimism that the AUM growth rate will pick up? Shriram’s decision to finance more new vehicles should boost AUM as the cost difference between new and old is substantial. Also, about 150 new branches will be added in FY27, which is significant, given that the branch network has remained flat at 3,225 for the 12 months leading up to Q1FY27. While more branches and manpower would mean higher costs, management clarified it does not see the cost-income ratio rising materially from 25% for Q1FY27 as productivity at new branches increases.
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