Table of Contents
1. About the Company
In this blog we are predicting shriram Finance Share Price Target from 2024 to 2030 based on past performance and companies recent financial performance.
Shriram Finance Limited (SHFL) is one of India’s leading non-banking financial companies (NBFCs), specializing in vehicle financing and other retail lending products.
Formed through the merger of Shriram Transport Finance Company and Shriram City Union Finance, SHFL has established itself as a powerhouse in the financial services sector.
With a rich history dating back to 1974, SHFL has grown to become a trusted name in the industry, serving millions of customers across India.
The company’s primary focus is on providing financial solutions to the underserved segments of society, particularly in rural and semi-urban areas.SHFL’s extensive network of over 3,000 branches spans across the country, allowing it to maintain a strong presence in both urban and rural markets.
This wide reach, combined with its deep understanding of local markets and customer needs, has been instrumental in the company’s sustained growth and success.
2.Products – Detailed Analysis and Information
Shriram Finance offers a diverse range of financial products catering to various customer segments:
a) Vehicle Finance:
- Commercial Vehicle Loans: SHFL’s flagship product, financing new and used commercial vehicles.
- Passenger Vehicle Loans: For both personal and commercial use.
- Tractor Loans: Supporting the agricultural sector.
- Construction Equipment Loans: Aiding infrastructure development.
b) MSME Loans:
- Business Loans: Working capital and expansion financing for small businesses.
- Loan Against Property: Secured loans for business or personal needs.
c) Gold Loans:
- Quick and easy loans against gold jewelry.
d) Personal Loans:
- Unsecured loans for various personal needs.
e) Two-Wheeler Loans:
- Financing for motorcycles and scooters.
f) Fixed Deposits:
- Offering attractive interest rates for retail investors.
Product Analysis:
- Vehicle Finance remains the core strength, contributing about 80% of the AUM.
- MSME loans are showing strong growth, reflecting SHFL’s focus on diversification.
- Gold loans have seen a temporary decline due to LTV adjustments but are expected to pick up.
- Personal loans growth has moderated as the company takes a cautious approach in the current economic environment.
3. Results and Performance
Key Financial Information (in INR Crores):
| Particulars | FY2024 (E) | FY2025 (E) | FY2026 (E) |
|---|---|---|---|
| Total Income | 20,200 | 23,700 | 28,700 |
| PPOP | 14,200 | 16,600 | 20,400 |
| PAT | 7,190 | 8,390 | 9,950 |
| AUM | 224,862 | 267,639 | 314,165 |
| NIM on AUM (%) | 9.2 | 9.1 | 9.4 |
| C/I ratio (%) | 29.7 | 30.0 | 29.0 |
| RoAA (%) | 3.3 | 3.2 | 3.2 |
| RoE (%) | 15.7 | 16.2 | 16.8 |
Performance Analysis:
- Consistent growth in Total Income and PAT projected over the next three years.
- AUM expected to grow at a CAGR of ~18% from FY2024 to FY2026.
- Stable NIM and improving RoE indicate efficient operations and profitability.
- Slight increase in C/I ratio in FY2025 suggests investments in expansion and technology.
4. 52-week Stock Summary and Past 12-month Stock Performance
52-week Stock Summary:
- High: INR 3,652
- Low: INR 1,761
- Current Price: INR 3,091
Past 12-month Stock Performance (Monthly Open, High, Low, Close):
Based on the available search results, here are the monthly OHLC (Open-High-Low-Close) values for Shriram Finance in 2024:
| Month | Open | High | Low | Close |
|---|---|---|---|---|
| December 2024 | 3,195.50 | 3,267.60 | 2,843.65 | 2,882.95 |
| November 2024 | 2,926.95 | 3,079.30 | 2,926.95 | 3,046.35 |
| October 2024 | 3,190.00 | 3,391.00 | 3,145.75 | 3,254.50 |
| September 2024 | 3219.95 | 3,652.15 | 3,190.05 | 3,576.95 |
| August 2024 | 3,234.30 | 3,262.65 | 3,174.65 | 3,199.55 |
| July 2024 | 2,902.05 | 3,044.00 | 2,635.50 | 2,931.95 |
| June 2024 | 2,479.35 | 2,546.95 | 2,193.00 | 2,497.95 |
| May 2024 | 2,448.00 | 2,658.00 | 2,354.20 | 2,588.55 |
| April 2024 | 2,510.55 | 2,578.80 | 2,429.95 | 2,518.85 |
| March 2024 | 2,374.05 | 2,430.00 | 2,338.25 | 2,386.35 |
| February 2024 | 2,411.00 | 2,535.00 | 2235.25 | 2438.60 |
| January 2024 | 2,055.55 | 2,496.55 | 2,016.00 | 2,466.80 |
Please note that the data is incomplete for some months due to limitations in the provided search results. The table includes the available information for each month in 2024.
5. Share Price Targets
Predicted share price targets based on financials and estimated growth:
| Year | Target Price (INR) | Reason for Upside |
|---|---|---|
| Shriram Finance Share Price Target 2024 | 4,000 | Strong AUM growth, improving asset quality |
| Shriram Finance Share Price Target 2025 | 4,500 | Expansion in non-vehicle finance segments |
| Shriram Finance Share Price Target 2026 | 5,100 | Sustained profitability and market share gains |
| Shriram Finance Share Price Target 2027 | 5,800 | Technology investments driving efficiency |
| Shriram Finance Share Price Target 2028 | 6,600 | Deeper penetration in rural markets |
| Shriram Finance Share Price Target 2029 | 7,500 | Diversification of product portfolio |
| Shriram Finance Share Price Target 2030 | 8,500 | Economies of scale and improved cost ratios |
| Shriram Finance Share Price Target 2035 | 14,000 | Long-term growth in financial inclusion |
| Shriram Finance Share Price Target 2040 | 22,000 | Market leadership and brand value |
Reasons for expected upside:
- Consistent AUM growth projected at 18-20% CAGR
- Improving asset quality and credit costs
- Diversification into high-yield products like MSME and gold loans
- Expansion of branch network and digital capabilities
- Potential credit rating upgrades reducing cost of funds
- Favorable government policies promoting financial inclusion
- Strong management team with proven track record
6. Key Management Personnel
- Y. S. Chakravarti: Managing Director & CEO
- Parag Sharma: Executive Director & CFO
- Umesh Revankar: Vice Chairman
- Arun Duggal: Non-Executive Chairman
- Maya S. Sinha: Independent Director
- S. Sridhar: Independent Director
7. Management Commentary
- Positive outlook on market demand, especially in rural and semi-urban areas
- Expectation of double-digit growth in vehicle finance segment
- Focus on expanding MSME and gold loan portfolios
- Confident of maintaining NIMs at current levels with potential for slight improvement
- Targeting to improve Stage 3 assets to 5%
- Emphasis on technology adoption for improved efficiency and customer experience
- Exploring opportunities for inorganic growth and strategic partnerships
8. Dividend History
| Financial Year | Dividend Per Share (INR) | Dividend Yield (%) |
|---|---|---|
| FY2024 (E) | 45 | 1.5 |
| FY2023 | 35 | 1.1 |
| FY2022 | 23 | 0.8 |
| FY2021 | 21 | 0.7 |
| FY2020 | 5 | 0.2 |
9. Corporate Action History
- October 2024: Announced stock split of 5:1
- September 2024: Raised USD 500 million through offshore bonds
- April 2023: Completed merger of Shriram Transport Finance and Shriram City Union Finance
- March 2022: Board approval for merger of group companies
- June 2021: Rights issue of equity shares
10. Key Conference Points
- AUM growth of 20% YoY to INR 2.43 trillion in Q2FY25
- Disbursements grew 16% YoY to INR 400 billion
- Asset quality improved with GS3/NS3 at 5.3%/2.7%
- Credit costs stable at 2.1% annualized
- Expansion of gold loan offerings to 1,400+ branches
- Focus on cross-selling opportunities and product diversification
- Positive outlook on CV and CE demand due to government infrastructure spending
11. Top 10 Shareholders
| Shareholder | Stake (%) |
|---|---|
| Shriram Ownership Trust | 25.4 |
| Life Insurance Corporation of India | 6.2 |
| Government Pension Fund Global | 3.8 |
| SBI Mutual Fund | 3.5 |
| HDFC Mutual Fund | 2.9 |
| Vanguard Group | 2.7 |
| BlackRock Inc. | 2.5 |
| Nippon India Mutual Fund | 2.3 |
| Mirae Asset Global Investments | 2.1 |
| Kotak Mahindra Mutual Fund | 1.9 |
12. FAQs
Q1: What is Shriram Finance’s primary business focus?
Shriram Finance primarily focuses on vehicle financing, especially commercial vehicles, along with MSME loans, gold loans, and personal loans.
Q2: How has the merger impacted Shriram Finance’s operations?
The merger has strengthened SHFL’s position in the market, allowing for a more diversified product portfolio and improved operational efficiencies.
Q3: What is the company’s strategy for growth in the coming years?
SHFL is focusing on expanding its non-vehicle finance segments, particularly MSME and gold loans, while maintaining its leadership in vehicle finance.
Q4: How is Shriram Finance addressing the challenges in the NBFC sector?
The company is maintaining a strong liquidity position, diversifying its funding sources, and focusing on asset quality to navigate sector challenges.
Q5: What is the company’s dividend policy?
SHFL has been consistently paying dividends, with a payout ratio of around 20-25% of profits.
Q6: How is Shriram Finance leveraging technology in its operations?
The company is investing in digital platforms for loan origination, customer service, and risk management to improve efficiency and customer experience.
Q7: What is the company’s approach to managing asset quality?
SHFL maintains a conservative approach to lending, with a focus on secured loans and robust underwriting practices to manage asset quality.
Q8: How does Shriram Finance plan to compete with banks in the vehicle finance space?
The company leverages its deep understanding of the sector, strong relationships with customers, and specialized products tailored for commercial vehicle operators to maintain its competitive edge.
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