GST cuts: Q3 to set positive momentum for rest of FY26: Umesh Revankar of Shriram Finance

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The government’s GST rate cuts are expected to spark fresh demand in the consumption and auto sectors, creating a positive environment for credit growth, according to Umesh Revankar, Executive Vice Chairman of Shriram Finance.

Calling the GST rationalisation move a “welcome step,” Revankar said many customers had been delaying purchases of vehicles, machinery and household goods due to rising prices over the last two to three years. “This relief comes right at the start of the festive season. It will encourage people to upgrade or buy new, boosting credit demand. MSMEs, traders, and shopkeepers will also see higher activity, and compliance levels are likely to improve,” he told ET Now.


Auto sector to benefit most

Revankar highlighted that Shriram Finance, with a large share of its loan book in the auto sector, will benefit directly. “Vehicle owners who had postponed upgradation will now make their purchases. The cut on tractors to 5% GST is especially positive, as rural India is doing well with good monsoons and crop conditions,” he said.

With lending exposure to two-wheelers, small trucks, light commercial vehicles (LCVs), and tractors, Revankar expects a sharp pickup in credit offtake.


Growth outlook

Shriram Finance had earlier guided for 15% growth in FY26. While Revankar did not revise the full-year guidance, he was optimistic about the immediate impact. “Q3 will be a big quarter for us, given our strong presence in auto loans. Growth will definitely be higher,” he said.

Looking further ahead, Revankar remained cautious. “Over the medium term, growth prospects are positive, but global uncertainties, including tariff-related challenges faced by MSMEs, need to be watched. For now, Q3 will set a positive momentum for the rest of FY26 and into FY27,” he added.
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