Shriram Finance Ltd. share price target

We value SFL at 2.4x Sep'27E ABV to arrive at a target price of Rs 1,150/share, implying an upside of 17% from the CMP.

Shriram Finance (SFL) is likely to emerge as a leader in the NBFC space in the next five years with structurally better profitability. Management highlighted that it expects a 100bps reduction in cost of borrowing (CoB) over the next 2–3 years and it would utilise the same to retain/acquire new customers.

Shriram Finance (SHFL) hosted an investor call on 30th Dec’25 to provide further clarity and address investor queries regarding the proposed preferential allotment of a ~20% equity stake to MUFG Bank for an aggregate consideration of USD4.4b.

SHFL hosted an analyst call to highlight its strategy for growth and utilization of the funds as a consequence of its announcement of the mega deal of Rs 396.2bn with MUFG. The deal is expected to close by end-FY26, subject to regulatory approvals.

We reiterate our BUY recommendation on the stock.

The Board of Shriram Finance (SHFL) has approved a preferential equity issuance of INR396.2b to MUFG Bank Ltd., a leading Japan-based financial institution, at an issue price of INR840.93 per share.

As of 30 Sep 2025, SHF has a huge presence with 3,225 branches across India and employee count of 78,833, customer base of ~96.6 lakhs. Key Development: Shriram Finance's Board has approved a preferential issue of ~39,618 crore to MUFG Bank through issuance of 47.1 crore equity shares at 840.93 per share, resulting in 20% fully diluted stake for MUFG, subject to shareholder and regulatory approvals (RBI, CCI, etc.). Post completion, both MUFG Bank and the Promoter Group will each hold ~20% stake in the company. MUFG will gain the right to nominate up to two non-independent directors. The agreement...

Shriram Finance (SFL) has entered into a strategic partnership with MUFG Bank (Japan-based), wherein the partner has agreed to invest ~USD 4.4bn for 20% stake in SFL via preferential issue

We maintain our BUY recommendation on the stock

As of 30 Sep 2025, SHF has a huge presence with 3,225 branches across India and employee count of 78,833, customer base of ~96.6 lakhs. Q2FY26 performance: Shriram Finance reported steady performance in Q2FY26, disbursement growth and asset quality remained broadly steady. Disbursements grew by 10.2% YoY to 49,019 crore, while AUM increased by 15.7% YoY to 2,81,309 crore. NII rose 11.7% YoY 6,266 crore, with margins inching up 8 bps QoQ amid utilization of excess liquidity. Operational efficiency continued to remain strong with credit cost stable at ~1.9% resulting in 11.4% YoY growth in earnings at...

Shriram Finance’s (SHFL) 2QFY26 PAT rose ~11% YoY to ~INR23b (~5% beat). PAT in 1HFY26 grew 10% YoY, and we expect PAT in 2HFY26 to grow 24% YoY.

We maintain our BUY recommendation on the stock.

Q1FY26 AUM grew 16.6% YoY to Rs 2,722.5 bn, led by strong growth in the PV, 2W, MSME and Farm Equipment portfolio. NII saw a lukewarm growth of 10% YoY impacted by negative carry from excess liquidity; however CoF has started to reduce and we expect NIM to improve in FY26. While credit cost was controlled (at 2.1%), Stage 2 increased by 40 bps QoQ. We remain conservative and build a higher credit cost of 2.1% for FY26E (vs. guidance of <2%). We marginally tweak our FY26/ FY27 estimates and expect SHFL to deliver RoA/ RoE of 3.3%/ 17.0% in FY27E, led by steady growth in AUM, favourable margin...

Shriram Finance’s (Shriram) Q1FY26 core operating performance remained strong with NII growth at 4% QoQ/10% YoY and a sequential easing in credit cost to 1.9% vs. 2.4% QoQ.

SFC AUM growth remain stable at 17% YoY led by 11% YoY growth in disbursements. Management maintained guidance for 15% YoY AUM growth for FY26E. We expect 16% CAGR (FY25-27) AUM growth. NIMs declined by 14bps QoQ led by higher public deposits raised during the quarter. However, NIMs are expected to improve with rate cut and lower liquidity. Asset quality remained stable with GS3 at 4.53% vs 4.55% led by better collections. NII grew by 10% YoY led by lower NIMs; PPoP grew by 9% YoY led by higher operating expenses (up 20% YoY). PAT grew by 9% YoY led by lower provisions (up 8% YoY). We have...

The last quarter of FY25 was a mixed bag for Shriram Finance (SHFL) as its AUM growth and disbursement momentum were healthy but its asset quality exhibited minor deterioration over the previous two quarters.

We maintain our BUY recommendation on the stock

Shriram Finance’s (Shriram) Q4FY25 financial performance was subdued with a sharp NIM contraction and a spike in credit cost. While headline asset quality improved with GNPL falling to 4.55% vs. 5.38% QoQ, this was driven by higher write-offs at >INR 20bn during Q4FY25.