The NBFC stock has logged a return of more than 50% in a period of six months. Analysts remain bullish on the stock and have maintained a buy rating with a huge upside potential.
The stock in focus here is Shriram Finance Limited. The shares opened at Rs. 1811.95 and gained up to 3% to hit its intra- day high of Rs 1,870. The stock rallied after it got a buy call from brokers.
Revenue in Shriram grew from Rs. 5,144 crore in Q1FY22 to Rs. 8,287 crore in Q1FY23 with an increase of 61%. The net profit growth in the last three years have shown an increase of over 77.3% from Rs. 965 crore and Rs. 1711 crore.
The promoters of the company have decreased their stake in the company from 29.3% in Q1FY22 to 25.4% in Q1FY23. The FIIs of the company have also surged in a year’s time. In Q1FY22, stake held by FIIs were 49.9% which is 55.3% in Q1FY23.
The shares of Shriram Finance got a Buy call from Brokerage UBS Analysts with a target price of Rs. 2,250 which represents an upside of 22.01% from the current levels.
Post the merger of Shriram Transport Finance and Shriram Union City Finance, Shriram Finance Limited started focusing more on commercial vehicle financing and two- wheeler segments. The company is said to grow by 10 to 15% in terms of vehicle financing. Its other new segments show a promising growth of 20 to 30%.
Shriram Finance Limited is the largest financier when it comes to two- wheelers and micro, small and medium enterprises. The company started generating high revenues after the sharp rise of personal loans. Shriram Finance is India’s largest NBFC which offers loans for personal and other uses including gold loans, car loans, home loans, small business loans.
Written by Bhumika Khandelwal
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