Goal: ₹700
CMP: ₹520.80
Shriram Finance (SHFL) affords a well-diversified product suite and has emerged as a robust participant throughout all its product segments. It has demonstrated sturdy execution capabilities and asset high quality resilience whereas navigating a number of credit score and financial cycles.
Despite the fact that issues may look like transferring slowly on the financial entrance in India, we imagine that financial exercise (reminiscent of infrastructure, actual property, and mining) will choose up within the subsequent 3-6 months, leading to wholesome demand for industrial automobiles (CV). On the flipside, even when the brand new CV phase slows down, SHFL stays higher positioned than its friends, owing to its sturdy foothold within the used CV phase.
SHFL is but to totally faucet its expanded distribution community (from the merger) to supply a a lot wider product bouquet to its clients. The corporate is successfully leveraging cross-selling alternatives to achieve new clients and introduce new merchandise, leading to improved working metrics and a stable basis for sustainable development.
The present valuation of about 1.3x FY27E BVPS is engaging for a 19 per cent PAT CAGR over FY24-27 and RoA/RoE of round 3.3/17 per cent in FY27.
SHFL is our prime choose within the NBFC sector with a TP of ₹700 (based mostly on 1.7x FY27E BVPS).
