Shriram Finance Gets 'Buy' From IDBI Capital After Q3 Results, Sees 38% Upside — Here's Why

Shriram Finance has now diversified from mono line business of commercial vehicle (mainly Used CV) to non-vehicle portfolio which was key hindrance in rating upgrade..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..IDBI Capital Report.Shriram Finance Ltd. AUM growth remained strong at 19% YoY backed by 15.8% YoY growth in disbursements. Management guided for 15% YoY AUM growth for FY26E. We maintained 17% CAGR (FY25 -27) AUM growth. Net interest margins declined by 26bps QoQ led by higher liquidity raised during the quarter. However, NIMs are expected to improve with rate cut expected next year. Asset quality remained stable with GS3 at 5.38% versus 5.32% led by better collections. Net interest income grew by 14% YoY led by lower NIMs; pre-provision operating profit grew by 11% YoY led by higher operating expenses (up 22% YoY). However, PAT grew by 96% YoY led by sale of subsidiary (Rs.16.5bn). We have rolled over to FY27E and maintain “Buy” rating with target price of Rs 730 valuing at two times FY2E ABV as strong AUM growth sustains along with 3%+ RoA..Click on the attachment to read the full report:.Shriram Finance Share Price Down Nearly 4% After Q3 Results.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Shriram Finance Gets 'Buy' From IDBI Capital After Q3 Results, Sees 38% Upside — Here's Why

The brokerage expects RoA to sustain above 3% post-merger with stable asset quality.

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