Brokerages like Macquarie, HSBC, Morgan Stanley, etc have shared their views regarding the future of this NBFC. In this article, we will try to understand their viewpoints.
Price MovementÂ
With a market capitalization of Rs 1,17,167 crore, the shares of Shriram Finance Ltd are currently trading at Rs 623 per share, down by 14.7 percent from its 52-week high of Rs 730 per share. During the last one year, the stock has given a positive return of 24.51 percent.
Financial HighlightsÂ
On Friday, the company announced its financial results and made a couple of announcements. Its revenue grew by 15 percent to Rs 41,834 crores in FY25, from FY24 revenue of Rs 36,388 crores. It increased by 20.78 percent YoY from 9,484 crores in Q4 FY24 to 11,454 crores in Q4 FY25. Additionally, on a QoQ basis, it rose by 7 percent from 10,698 crores in Q3 FY25 to 11,454 crores in Q4 FY25
It posted a net profit of Rs 9,576 crores in FY25, up by 29.42Â percent, from its FY24 net profit of Rs 7,399 crores. And increased by 6 percent YoY from 2,021 crores in Q4 FY24 to 2,144 crores in Q4 FY25. However, on a QoQ basis, it declined by 34 percent from 3,249 crores in Q3 FY25 to 2,144 crores in Q4 FY25. Additionally, the company declared a final dividend of Rs 3 per equity share.
The bank’s net interest income (NII) in FY25 stood at Rs 22,835.09 crores, as compared to Rs 19,686.85 crores, i.e., a rise of 16 percent. Its AUM increased by 17 percent YoY, to Rs. 2,63,190 Crores.
Also read: Reliance Group stock jumps 5% after announcing Q4 results
Analyst Comments post Q4 results
Macquarie is optimistic about Shriram Finance, with a target price of Rs 800, which suggests an upside of 29%. Macquarie mentioned that Shriram Finance’s after-tax profit fell short of expectations as a result of lower NIM and higher credit costs, partially mitigated by lower taxes. Increased liquidity continues to weigh on NIMs, creating risks for NIM and ROA in FY26. Management estimates FY26 NIM of 8.4%, compared with 8.55% in FY25.
Morgan Stanley has an Overweight rating with a target price of Rs 750, with an upside of 21%. Morgan Stanley pointed out that Shriram Finance’s credit expenses at 2.42% were above its 2.1% estimate, with net Stage 2+3 slippages increasing but not accounting for the growth entirely. The company wrote off ₹2,340 crore worth of fully provided NPLs in Q4. Stage 3 slippages were in line with Morgan Stanley’s FY26 estimates, while the Stage 2 jump in early FY25 was relatively small at 12 bps year-on-year.
CLSA rates the stock Outperform with a target price of Rs 670, implying an 8% upside. CLSA reported that Shriram Finance’s Q4 NII fell 5% short of estimates because of lower NIMs on the back of greater liquidity and high credit costs of NPA write-offs. Net slippages increased, however, fee income was good and opex also better than expected. Though loan growth slowed a bit, the company expects 15% loan growth for next year with stable asset quality and modest NIM improvement.
About the company
Shriram Finance Limited, which was founded in 1979 and has its head office in Mumbai, India, is a non-banking finance company. It offers a variety of financial products such as loans for commercial vehicles, tractors, farm equipment, and construction equipment, as well as personal, gold, and business loans.
It also provides insurance products and payment solutions. Shriram Finance serves first-time buyers, small road transport operators, MSMEs, and self-employed professionals.Â
Written by Satyajeet Mukherjee
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