Shriram Finance Ltd. share price target

Steady quarter with positive outlook ; Retain BUY'

Healthy disbursements; NIM and credit costs surprise negatively Motilal Oswal values your support in the Asiamoney Brokers Poll 2021 for...

Asset quality outcome better than expectations

stood healthy at YoY levels as a result of strong existing proposals pipe-line. Going forward, re-rating from current levels would be an outcome of ultimate credit loss which will be function of performance of perceivable stress pool...

Upgrade MMFS to HOLD (earlier REDUCE) on higher EPS expansion Our channel checks indicate that commercial vehicle (CV) finance business is expected to accelerate on the back of healthy demand conditions, anticipated improvement in supply chain and resilient balance sheets of financiers. They suggest (a) disbursements stand 80% of last year levels; ECLGS provides some boost (b) regulatory dispensations (restructuring/ ECLGS) mask true asset quality picture, but CV financiers' balance sheets remain resilient (c) new business asset quality intact, stress in seasoned...

Shriram Transport Finance Company's (SHTF) Q3FY21 numbers were marginally higher than our estimates

Shriram Transport Finance Company Ltd. (SHTF) reported numbers higher than our estimates given better than expected margins

Co. has been able to collect from 84%/23%/52%/71%/73%/78% borrowers in the month of Mar/Apr/May/Jun/Jul/Aug'20 respectively. Q2FY21 earnings stood mixed with better clarity on asset quality expected to emerge in forthcoming quarter. While provisioning run-rate declines and collections gain pace, our FY21 EPS estimates stand higher by 9%. With additional provision of Rs23bn pushing ECL coverage to ~40%, provisions run-rate now has come down to Rs7bn as against Rs10-11bn over past two...

Over the last four decades, Shriram Transport Finance (SHTF) has built a pan-India network in a fragmented used-CV market (~16% CV market share).

14 August2020 Shriram Transport Finance (SHTF)s 1QFY21 PAT halved to INR3.2b (6% miss). While growth was muted, collection efficiency improved MoM. SHTF also cut opex by 30% QoQ. We modestly increase FY21 estimates to factor higher AUM and lower opex. Our credit cost estimate of 3.5% for FY21 remains unchanged. on the books stood at INR115b as of 12 Aug20. With the COVID-19 provisions, SHTF has increased its Stage-3 PCR from 35% to 39% and Stage-1/2 PCR from 3.1% to 3.7% QoQ. Less than 10% of customers would need restructuring, according to management. Due to a change in accounting policy, the fair value of hedges is now routed through OCI rather than the P&L.; Since the IL&FS; crisis, the company has diversified into new borrowing sources such as retail NCDs and ECBs. The share of ECBs in total borrowings increased meaningfully to 18% YoY from 10%.