1 day Ago
Axis Securities has a buy call on Shriram Finance with a target price of Rs 705.0. The current market price of Shriram Finance .
is Rs 523.5. Shriram Finance, incorporated in 1979, is a Large Cap company with a market cap of Rs 19705.
48 crore, operating in the NBFC sector. Shriram Finance's key products/revenue segments include Interest, Other Operating Revenue, Fees & Commission Income, Income From Financial Services, Income From Sale Of Share & Securities, Dividend and Rental Income for the year ending 31-Mar-2024. Financials For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 10705.
47 crore, up 6.03% from last quarter Total Income of Rs 10096.68 crore and up 15.
04% from last year same quarter Total Income of Rs 9305.75 crore. The company has reported net profit after tax of Rs 3245.
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Gokul Dixit, Mr.S Ravindran, Mr.Pradeep Kumar Panja, Mr.
S Sridhar, Mrs.Maya Sinha, Mr.D V Ravi, Mr.
Ignatius Michael Viljoen, Mr.Parag Sharma, Mr.Y S Chakravarti, Mr.
Umesh Revankar, Mrs.M V Bhanumathi. Company has Haribhakti & Co.
LLP as its auditors. As on 31-12-2024, the company has a total of 38 crore shares outstanding. Investment Rationale The Shriram Finance management highlighted that rural demand remains robust and is expected to drive healthy AUM growth for SFL.
Growth in the CV segment has been slower, primarily led by an increase in ATS (prices up ~30% over the past three years) rather than volume growth. Volume growth in the CV segment has been constrained due to limited capacity additions, with existing capacity witnessing improved utilisation rates. However, strong CV sales over the past couple of years are expected to support healthy growth in used CVs over the next 2-3 years.
Additionally, with infrastructure activity picking up pace, the management remains optimistic about the recovery in the demand for new CVs. In PV financing, growth has been driven by both value and volume. SFL?s market share in PV financing remains low, and the management foresees a significant growth runway ahead.
Limited investment in public transport, except in select metro and Tier I cities, coupled with the graduation of 2W customers to used-PVs, is expected to sustain buoyant growth in the segment. In the 2W segment, SFL aims to maintain 2x industry growth. Gold loan growth is anticipated to pick up in Q4FY25.
Overall, the management remains optimistic about sustaining strong growth across segments. AUM is projected to grow at a steady and broad-based 16% CAGR over FY25-27E. According to Axis Securities, the current Valuation of the company is 2.
0x FY27E BV; the earlier Valuation was: 2.2x FY27E BV. Current target price is Rs 705/share (Rs 765/share earlier).
Axis maintains the BUY recommendation on the stock. Promoter/FII Holdings Promoters held 25.4 per cent stake in the company as of 31-Dec-2024, while FIIs owned 53.
08 per cent, DIIs 15.77 per cent. (You can now subscribe to our ETMarkets WhatsApp channel ).
