Shriram Finance Gains As InCred Sees 43% Upside, Says Operations At 'Sweet Spot'
Shriram Finance's stock rose as much as 1.77% during the day to Rs 3,022 apiece on the NSE.
Shares of Shriram Finance Ltd. rose as InCred Equities said the financier is positioned well to overcome any slowdown in vehicle finance. It sees a 43% upside in the stock.
The brokerage maintained an 'add' rating on the stock with a target price of Rs 4,250 per share, a potential upside of 43% from the previous close.
InCred Equities added Shriram Finance to its high-conviction list as it believes the company is well-positioned to dodge the slowdown in the vehicle finance sector versus its peers. The brokerage expects the declining interest rate scenario to be beneficial to the non-banking financial company, it said in a note Dec. 07.
Net interest margin is set to improve in fiscal 2026, led by strong asset under-management growth, falling interest rates and improving system liquidity, it said. The brokerage "finds comfort in the asset quality trend improving in the non-vehicle loan book."
The recent 20% correction in the stock price amid sluggishness in the vehicle industry has overplayed, InCred Equities said. "Shriram Finance is much better placed than its larger peers."
Slower-than-expected growth and a spike in fresh loan slippage are the key risks for the analyst's estimates, it said.
Shriram Finance's stock rose as much as 1.77% during the day to Rs 3,022 apiece on the NSE. It was trading 0.22% higher at Rs 2,976 apiece, compared to a 0.53% advance in the benchmark Nifty 50 as of 11:06 a.m.
The shares have risen 35% during the last 12 months. The relative strength index was at 47.
Thirty-nine out of the 41 analysts tracking the company have a 'buy' rating on the stock, one suggests a 'hold' and one has a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 22.8%.
