SHRIRAMFIN - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

📊 Core Financial Analysis

Profitability & Returns

EPS: ₹51.5 — strong earnings for a ₹638 stock.

ROE: 15.6% & ROCE: 11.0% — solid return metrics, especially ROE, indicating efficient equity use.

PAT Qtr: ₹2,159 Cr vs ₹2,144 Cr — stable profitability with 9.39% YoY growth, showing consistency.

Debt & Leverage

Debt-to-Equity: 4.15 — high, but typical for NBFCs due to their lending model.

Dividend Yield: 1.55% — decent payout, adds to shareholder value.

Book Value: ₹300 — trading at ~2.1x book, reasonable for a financial stock with strong ROE.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 14.1 Undervalued vs industry PE of 25.2

P/B Ratio ~2.13 Reasonable for a high-ROE NBFC

PEG Ratio 0.32 Very attractive, suggests undervaluation relative to growth

Intrinsic Value ~₹700–₹750 Current price is below fair value, offering upside

🏢 Business Model & Competitive Edge

Shriram Finance is a leading NBFC focused on

Commercial vehicle financing

SME lending

Retail loans and deposits

Competitive advantages include

Strong rural and semi-urban presence

Deep customer relationships

Robust underwriting and collections

Merger synergies and digital transformation are enhancing scale and efficiency.

📉 Technical & Sentiment Indicators

RSI: 43.5 — mildly oversold, potential for rebound.

MACD: -10.5 — bearish momentum, but flattening.

Volume below average — consolidation phase.

DMA 50 > Current Price, DMA 200 < Current Price — short-term weakness, long-term support.

FII selling, DII buying — mixed institutional sentiment.

🧠 Investment Guidance

🔍 Entry Zone (If Undervalued)

Ideal Buy Range: ₹610–₹630

Near DMA 200 and below intrinsic value.

Good entry for long-term investors.

📈 Long-Term Holding View

Strong Buy & Hold

Attractive valuation and consistent earnings.

High ROE and PEG ratio support long-term compounding.

Watch for credit cycle risks and regulatory changes.

Would you like a breakdown of Shriram Finance’s loan book composition or a comparison with peers like Bajaj Finance and M&M Financial to assess relative positioning?

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