Shriram Finance Shares Soar After Bullish Brokerage Calls: Target Price Revised
Shriram Finance shares are buzzing in trade on Monday after the non-banking financial company (NBFC) posted its September quarter results, which showed strong momentum. The stock is trading at Rs 789, which accounts for gains of more than 5%. The shares had reached an intraday high of Rs 794, which compares to Friday’s closing price of Rs 748.
Strong Q2 Results Drive Momentum
The sharp rally in Shriram Finance comes on the back of second-quarter earnings that witnessed margin improvement on lower cost of funds. Lower credit costs also aided the NBFC’s profitability metrics, while operating expenses were lowered thanks to branch consolidation and lower employee count.
The company’s strong Q2 results have led to a revision in target prices by several brokerages. CLSA has maintained an ‘outperform’ rating on the counter while hiking the target price from Rs 735 to Rs 840. JPMorgan, too, has maintained an ‘overweight’ rating on Shriram Finance while increasing the target price from Rs 740 to Rs 840.
Brokerages Bullish on Shriram Finance
Both brokerages have highlighted Shriram Finance’s lower credit cost in the September quarter as well as stable asset quality. JPMorgan adds that there could be further re-rating on earnings upgrades. The brokerage firms’ positive outlook on the company has led to a surge in investor interest, with the stock being traded heavily on Monday.
Going forward, Shriram Finance expects NIMs to improve to 8.4% by the fourth quarter of this financial year, while the NBFC is targeting 16% asset under management (AUM) growth in the second half of the financial year ending March 2026. To know more about NIM and AUM growth, visit our website.
Technical Indicators Suggest Overbought Territory
Currently trading at a relative strength index of 75, which suggests the stock could be in an overbought territory, Shriram Finance has given returns of more than 36% on a year-to-date basis. The stock’s technical indicators suggest that it may be due for a correction, but the bullish brokerage calls have led to a surge in investor interest.
Thirty-four out of the 39 analysts tracking the company have a ‘buy’ rating on the stock. Three recommend a ‘hold’ while two recommend ‘sell’, according to Bloomberg data. The 12-month analysts’ consensus target price on the stock is Rs 809, implying an upside of 3%.
Investor Sentiment Remains Positive
The positive sentiment around Shriram Finance is reflected in the Indian stock market trends, with the Nifty and Sensex indices trading higher on Monday. The company’s strong Q2 results and bullish brokerage calls have led to a surge in investor interest, with the stock being traded heavily on Monday.
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