Shriram Finance
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Shriram Finance's recent performance underscores a robust growth trajectory, driven by strong vehicle finance and a strategic pivot towards higher-yield segments like MSME and gold loans. Management's guidance of 18% AUM growth for FY27 reflects confidence in operational efficiency and market expansion, particularly leveraging its extensive branch network. The recent capital infusion from MUFG enhances the company's balance sheet, allowing for lower funding costs and improved profitability. However, potential risks from macroeconomic factors, such as erratic monsoon patterns and geopolitical tensions, warrant caution. Vista's financial outlook anticipates accelerating revenue growth and improving margins, supported by a favorable macro environment and government initiatives like the Emergency Credit Line Guarantee Scheme. Over the next 12-24 months, key opportunities lie in scaling the gold loan and MSME segments, while watchpoints include asset quality volatility and the impact of external economic conditions. Overall, Shriram Finance is well-positioned for sustained growth, provided it navigates these challenges effectively
Why We Like This Stock
- Strong AUM growth target of 18% for FY27, supported by a diversified product strategy
- Recent capital infusion from MUFG enhances balance sheet strength and lowers funding costs
- Focus on high-yield segments like MSME and gold loans positions the company for improved profitability
Things To Watch Out For
- Potential asset quality volatility due to macroeconomic factors like erratic monsoon patterns
- Geopolitical tensions may impact operational stability and market sentiment
- Increased operational costs from branch expansions could pressure near-term margins
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 20,105 | 25,412 | 26,612 | 30,888 | 37,180 |
| Profit Before Tax (Cr.) | 9,481 | 10,817 | 13,301 | 18,634 | 21,772 |
| PBT Margin | 47.2% | 42.6% | 4998.1% | 60.3% | 58.6% |
| Net Profit (Cr.) | 6,184 | 7,717 | 9,160 | 12,764 | 14,913 |
| Earnings Per Share | 26.1 | 32.7 | 38.9 | 54.2 | 63.4 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Axis Securities | ▲ Buy | 1,200 | 26-Apr-2026 |
| CLSA | ▲ Buy | 1,150 | 26-Apr-2026 |
| Citigroup | ▲ Buy | 1,180 | 26-Apr-2026 |
| Elara Capital | ▲ Buy | 1,300 | 27-Jul-2026 |
| Emkay Global | ▲ Buy | 1,200 | 27-Jul-2026 |
| HDFC Securities | ► Add | 1,100 | 26-Apr-2026 |
| HSBC | ► Hold | 1,140 | 27-Jul-2026 |
| ICICI Securities | ▲ Buy | 1,225 | 27-Jul-2026 |
| IDBI Capital | ▲ Buy | 1,200 | 27-Jul-2026 |
| JPMorgan | ▲ Buy | 1,180 | 13-Apr-2026 |
| Jeffries | ▲ Buy | 1,210 | 27-Jul-2026 |
| Kotak Securities | ► Add | 1,100 | 26-Apr-2026 |
| Macguire | ▲ Buy | 1,220 | 26-Apr-2026 |
| Moneycontrol | ▲ Overweight | nan | 27-Jul-2026 |
| Morgan Stanley | ► Equalweight | 1,325 | 10-Apr-2026 |
| Motilal Oswal | ▲ Buy | 1,235 | 27-Jul-2026 |
| Nomura | ▲ Buy | 1,200 | 26-Apr-2026 |
| Prabhudas Liladhar | ▲ Buy | 1,250 | 27-Jul-2026 |
| UBS | ▲ Buy | 1,230 | 27-Jul-2026 |
Company Overview
Show Company Profile
Shriram Finance Limited, a non-banking finance company, provides financing services in India. It offers fixed and recurring deposits; commercial vehicle loans for commercial goods vehicles, passenger commercial vehicles, tractors and farm equipment, and construction equipment; two-wheeler, gold, used car loan, and personal loans; and green finance services. The company also provides business loans, such as MSME loans; working capital loans, including tyre, tax, fuel, toll financing, repair/top-up loans, fuel finance, challan discounting and vehicle insurance premium loans; motor insurance, including four-wheeler, two-wheeler, passenger and goods carrying vehicle insurance products; non motor insurance products, such as personal accident, shri criti care, and home insurance; and life insurance products comprising savings, retirement, child, protection plans, as well as recharges, including mobile recharge, mobile postpaid, landline postpaid, DTH, and FASTag recharge services. In addition, it offers utilities and bills services, such as electricity, LPG gas, gas bill payment, broadband postpaid, water, and cable tv; financial services and taxes comprising credit card, loan repayment, insurance, municipal services, and recurring deposit; and other services, such as housing society, clubs and associations, and education fees. It serves first time buyers, small road transport operators, commercial vehicles operators, micro, small, and medium enterprises (MSMEs), and individuals. The company was formerly known as Shriram Transport Finance Company Limited and changed its name to Shriram Finance Limited in November 2022. Shriram Finance Limited was incorporated in 1979 and is based in Mumbai, India.