Shriram Finance is one of the largest retail NBFCs offering credit solutions for commercial vehicles, two-wheeler loans, car loans, home loans, gold loans, personal and small business loans. The company is a part of the 48-year-old Shriram group.
In November 2022, Shriram Group’s entities – Shriram Transport Finance Company Limited, Shriram City Union Finance Limited, and Shriram Capital Limited – merged to form Shriram Finance Limited.
The company recently reported its first quarterly operating performance as a merged entity. HDFC Securities said that while the company’s profit and loss metrics are not comparable on a year-on-year (YoY) basis, the balance sheet and asset quality outcomes indicate a healthy quarter.
HDFC Securities has maintained an ‘Add’ rating on the shares with a target price of ₹ 1,717. This indicates an upside of ₹ 402 per share or 30.57% as compared to the company’s closing price of ₹ 1315.00 apiece on Thursday.
Currently, Foreign Institutional Investors (FIIs) have a high stake in the company at 42.90%, followed by its promoters at 25.29%, retail investors at 20.68% and Domestic Institutional Investors (DIIs) at 11.13%.
Shriram Finance is a large-cap company with a market capitalization of ₹ 48,962 crores. It has a return on equity of 11.38% and a dividend yield of 1.38%. The company’s shares were trading at a price-to-earnings ratio of 7.85, which is significantly lower than the industry average of 25.66, indicating that the stock might be undervalued as compared to its peers.
Written by Simran Bafna
