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Motilal Oswal Report
Shriram Finance Ltd. continues to demonstrate strong business momentum, supported by healthy net interest margin, improving asset quality, and robust growth drivers across commercial vehicle, passenger vehicle finance, MSME, and gold loans.
The moderation in credit costs and disciplined balance sheet management positions the company well for sustained earnings growth. Its diversified AUM mix, improved access to lower-cost funding from the credit rating upgrade, and strategic partnership with MUFG add further strength to the franchise.
The stock is currently trading at 2.1x FY27E P/B. The brokerage expects Shriram Finance to deliver a ~19%/~29% AUM/PAT CAGR over FY26-28E, along with an RoA/RoE of ~3.9%/13.6% by FY28.
Motilal Oswal reiterates Buy rating with a target price of Rs 1,200 (premised on 2.2x FY28E book value per share).
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