Stock Snapshot
Price Performance
Recommendation Rationale
Strong growth outlook supported by strategic investments and operational improvements.
Basis of our Recommendation
Shriram Finance is positioned for robust growth, bolstered by MUFG's investment, a strong capital base, and healthy increases in assets under management (AUM) and net interest margin (NIM). Despite some external uncertainties, the company's operational efficiency and credit quality improvements support a favorable market outlook.
Why We Like This Stock
- MUFG's investment enhances capital and profitability
- Projected 18% AUM increase in FY27 indicates strong demand
- 40.86% YoY PAT increase reflects robust market sentiment
Things To Watch Out For
- Management remains cautious due to external uncertainties
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 20,105 | 25,412 | 26,612 | 32,325 | 38,380 |
| Profit Before Tax (Cr.) | 9,481 | 10,817 | 13,301 | 17,054 | 20,944 |
| PBT Margin | 47.2% | 42.6% | 50.0% | 52.8% | 54.6% |
| Net Profit (Cr.) | 6,184 | 7,717 | 9,160 | 11,681 | 14,346 |
| EPS | 32.7 | 40.9 | 48.7 | 62.1 | 76.2 |
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, and challan discounting; 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 payment services, such as electricity, LPG gas, gas, 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 hospital and pathology, housing society, clubs and associations, and education fees. It serves first time buyers, small road transport operators, individuals, micro, small, and medium enterprises (MSMEs), salaried professionals, and self-employed 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.