The IIFL Securities Report: Buy Shriram Finance - June 13

IIFL Securities recommends buying Shriram Finance shares at the current market price of Rs 2673.4. The brokerage firm has a target price of Rs 2750 for the stock, indicating an upside potential of around 3%. The company's strong financial performance, expanding loan book, and focus on digital transformation are key factors supporting the buy call.

About Shriram Finance:

Shriram Finance is an Indian financial services company headquartered in Chennai, India. It is a part of the Shriram Group. The company provides a range of financial products and services, including personal loans, two-wheeler loans, business loans, and gold loans. Shriram Finance has a network of over 3,000 branches and over 20,000 employees. The company has a loan portfolio of over ₹1 lakh crore (US$14 billion). Shriram Finance is listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE).

52 Week Price Trend:

Shriram Finance, a leading non-banking financial company, has witnessed significant appreciation in its stock price. Currently trading at Rs 2673.4, the stock has surged by over 100% from its 52-week low of Rs 1190. However, it remains slightly below its 52-week high of Rs 2535. Despite the recent correction, analysts remain largely positive on the stock due to its strong business fundamentals, healthy loan portfolio, and prudent risk management practices. The company's focus on the retail segment, coupled with its digital initiatives, is expected to drive future growth.

Stratzy's MOST Analysis:

Stratzy's MOST framework evaluates stocks based on Management, Outlook, Safety, and Trend. SHRIRAMFIN's AA- rating suggests that it has strong fundamentals, with a competent management team, positive growth outlook, robust financial health, and a consistent positive trend in its business performance. This implies that the company has a low fundamental risk, indicating its stability and potential for long-term growth. The rating provides investors with confidence in the company's financial soundness and its ability to withstand market fluctuations.

Company's Fundamentals:

Shriram Finance (SHRIRAMFIN) is currently trading at a Price-to-Earnings (PE) ratio of 14.06, indicating that the stock is priced at 14.06 times its annual earnings. The Price-to-Book (PB) ratio of 2.02 suggests that the market value of SHRIMRAMFIN is 2.02 times the recorded value of its assets. The Dividend Yield of 1.41% represents the annual dividend received per share as a percentage of the current stock price, providing insight into the company's commitment to returning value to shareholders.

Fundamental and Technical information provided in this blog were last updated on 13 Jun, 2024

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