Shriram Finance- Motilal Oswal's Top Pick In NBFC Sector — Here's Why

Shriram Finance offers a combination of market leadership, strategic diversification into high-growth non-auto segments, potential for margin and operating efficiency improvements, and attractive valuations with strong earnings visibility..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..Motilal Oswal Report.Shriram Finance Ltd. is currently facing transitory headwinds in its asset quality (compounded by weakness in economic activity) and net interest margin compression (driven by surplus liquidity on the balance sheet). We expect these headwinds to gradually subside as over the last two years, the company’s execution on AUM growth and asset quality has been far ahead of its peers. Notably, Shriram Finance has yet to fully leverage its expanded distribution network. We anticipate that tangible benefits from this enhanced reach will continue to materialize for another 12-18 months, driving further improvement in its performance.Shriram Finance offers a combination of market leadership, strategic diversification into high-growth non-auto segments, potential for margin and operating efficiency improvements, and attractive valuations with strong earnings visibility. .The current valuation of ~1.6x FY27E book value per share is attractive for a ~19% PAT CAGR over FY25-27E and RoA/RoE of ~3.3%/17% in FY27E. Shriram Finance is our top pick in the NBFC sector with a target price of Rs 800 (based on 2x FY27E BVPS).Click on the attachment to read the full report:.Bharat Electronics, Bharti Airtel Lead FY26 Earnings Upgrades By Motilal Oswal.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- Motilal Oswal's Top Pick In NBFC Sector — Here's Why

Motilal Oswal reiterate Buy rating on Shriram Finance with a target price of Rs 800, based on 2x FY27E P/BV.

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