Shriram Finance Ltd. share price target

Liquidity pressure continues to weigh on growth SHTF reported 4QFY19 PAT of INR7.5b (19% beat), largely by lower credit costs and tax rate. PPoP grew 3% YoY (5% miss) due to a contraction in margins by 40bp YoY and moderate AUM growth of 9% YoY. Liquidity pressure continues to weigh on loan growth. Used vehicle loans grew 1% QoQ (+8% YoY) to INR871b. However, over the past few quarters, the new vehicle loan book has been declining from INR127b in 1HFY19 to INR116b in FY19, a decline of 9%. We expect loan growth to pick up only in 2HFY20....

We evaluated likely impact of a merger between Shriram Transport Finance Change in Estimates | Target | Reco value for shareholders. Merger of SHTF+SCUF would see holding company...

We evaluated likely impact of a merger between Shriram Transport Finance Change in Estimates | Target | Reco value for shareholders. Merger of SHTF+SCUF would see holding company...

Maintain BUY with a TP of Rs 1,486 (2.0x Dec-20 ABV of Rs 741). After a stellar 2Q, SHTFs 3Q was expectedly disappointing. AUM growth ground to a halt (~15% YoY, flat QoQ) and disbursals plunged (down 29/31%), as used vehicle disbursals dipped ~18/22%. SHTF securitised/ assigned ~Rs 54bn in 3Q. NIMs compressed to ~7.44% as the rise in CoF (+11bps QoQ) outpaced the growth in yields (+6bps). Asset quality was stable as Gross Stage III was flat QoQ at ~Rs 90.3bn.

While market challenges proved as a dampener on disbursals (used de-grew 18% YoY) and core AUMs reported mere 12% YoY, SHTF maintained decent earnings performance with PAT growing 17% YoY at Rs 6.4bn (PLe: Rs 6.1bn). Beat on numbers were largely driven by NII putting up healthy 15% YoY growth translating into healthy 17%+ YoY growth in PPoP indicating core metrics remaining strong for SHTF. While NIMs at 7.4% were maintained, funding costs pressures have been rightly compensated by rebound in asset...

Shriram Transport Finance Company Ltd. (SHTF) Q3FY19 financial results were broadly in-line with our estimates.

SHTF reported 2QFY19 PAT of `609cr (up 23% yoy/6% qoq), helped by strong AUM growth and marginal improvement in NIM. NII increased 25% yoy with reported NIM increased 6bps (8bps qoq) to 7.52%. Operating profit growth was healthy at 23% YoY to `1,622cr. Asset quality improved QoQ with Gross Stage 3 ratio falling 40bps QoQ to 8.71% (on AUM)..

Maintain BUY with a TP of Rs 1,544 (2.0xSept-20 ABV of Rs 772) SHTFs stellar show continued into 2Q. AUM growth of ~21% was healthy and broad based. NIMs rose led by combination of rising yields and a drop in the CoF. Opex growth (26%) was controlled despite the capacity expansion (+266 branches and 3951 employees over the last 1-yr). Flattish Gross Stage III and a ~1% sequential drop in Net Stage III are indicative of stable asset quality. SHTF proactively provided Rs 600mn towards the Kerala floods.

Shriram Transport Finance Company Limited (SHTF) reported strong set of results in terms of Revenue, Operating profit and PAT aided by healthy growth in AUM.

26 October 2018 Shriram Transport Finance (SHTF) reported 2QFY19 PAT at INR6.1b, 5% ahead of our estimate (22% YoY growth), helped by strong AUM growth and slight improvement in NIM. Disbursements were up 12% YoY to INR138b; however, used vehicle disbursement growth was moderate at 8%. AUM grew 21% YoY to INR1.05t, led by strong growth across all segments. The used commercial vehicle (CV) loan book grew 15% YoY while the new CV segment and other segment registered robust growth of 46% YoY. Reported margins were up 5-10bp both QoQ and YoY. C/I ratio came in ~100bp higher on a YoY basis at 22%. Gross Stage 3 loans declined 1% YoY to INR91b (8.7% of AUM v/s 9.1% in the previous quarter). However, credit costs for the quarter came in at INR6.8b v/s our expectation of INR5.3b. management, bank lending to the NBFC space is still sluggish.