Shriram Finance Ltd’s fundamental analysis highlights key financial metrics including market capitalization of ₹1,10,789 crore, PE ratio of 14.7, debt-to-equity ratio of 3.99, and return on equity of 25.9%. These figures reflect the company’s financial health and current market valuation.
Content:
- Shriram Finance Ltd Overview
- Shriram Finance Financial Results
- Shriram Finance Financial Analysis
- Shriram Finance Company Metrics
- Shriram Finance Stock Performance
- Shriram Finance Peer Comparison
- Shriram Finance Shareholding Pattern
- Shriram Finance History
- How To Invest In Shriram Finance Ltd Share?
- Shriram Finance Limited Fundamental Analysis – FAQs
Shriram Finance Ltd Overview
Shriram Finance Ltd is a prominent non-banking financial company (NBFC) in India, offering diverse financial services including commercial vehicle loans, personal loans, and insurance. It focuses on rural and semi-urban markets, supporting financial inclusion.
The company has a market capitalization of ₹1,10,789 crore and is listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Currently, the stock is trading 3.67% below its 52-week high and 67.5% above its 52-week low.
Shriram Finance Financial Results
Shriram Finance’s financial results show robust performance with FY24 sales rising to ₹36,413 crore. The company reported a net profit of ₹2,396 crore and an EPS of ₹663.98, reflecting strong growth across key metrics.
- Revenue Trend: Revenue surged from ₹19,274 crore in FY22 to ₹36,413 crore in FY24, indicating a consistent upward trend.
- Equity and Liabilities: Expenses increased significantly, rising from ₹11,772 crore in FY22 to ₹21,459 crore in FY24, highlighting a growing operational scale.
- Profitability: Operating profit grew from ₹7,502 crore in FY22 to ₹14,954 crore in FY24, with an OPM of 41.07%, showing improved profitability.
- Earnings Per Share (EPS): EPS improved to ₹663.98 in FY24 from ₹646.31 in FY22, reflecting higher profitability per share.
- Return on Net Worth (RoNW): The company’s Return on Net Worth (RoNW) improved in FY24 due to higher net profit of ₹2,396 crore, translating into an EPS of ₹663.98, compared to ₹352.18 in FY23.
- Financial Position: The company maintained a solid financial position with high sales and profitability, despite rising expenses and interest costs.
Shriram Finance Financial Analysis
| FY 24 | FY 23 | FY 22 | |
| Sales | 36,413 | 30,508 | 19,274 |
| Expenses | 21,459 | 17,812 | 11,772 |
| Operating Profit | 14,954 | 12,696 | 7,502 |
| OPM % | 41.07 | 41.61 | 38.92 |
| Other Income | 4,552 | 4,169 | 3,861 |
| EBITDA | 10,402 | 8,527 | 3,641 |
| INTEREST | 24.7 | 25.83 | 23.11 |
| Depreciation | 7,840 | 6,333 | 2,813 |
| Profit Before Tax | 196.32 | 160.54 | 102.23 |
| Tax % | 22.92 | 21.8 | 19.56 |
| Net Profit | 2,396 | 1,269 | 2,337 |
| EPS | 663.98 | 352.18 | 646.31 |
| Dividend Payout % | 15.81 | 28.39 | 13.93 |
*All values in ₹ Crores
Shriram Finance Company Metrics
Shriram Finance has a market cap of ₹1,10,789 crore and a current stock price of ₹2,947. The company reports a robust EPS of ₹205, a dividend yield of 1.51%, and an impressive return on equity of 15.9%.
- Market Cap: Shriram Finance boasts a market capitalization of ₹1,10,789 crore, reflecting its significant market presence and strong investor confidence.
- Book Value: The company’s book value stands at ₹1,302, indicating the net asset value per share, which showcases its financial strength and asset backing.
- Face Value: Shriram Finance has a face value of ₹10 per share, representing the nominal value assigned to each share, which is consistent with standard equity issuance practices.
- Turnover: The asset turnover ratio is 0.16, illustrating the company’s efficiency in generating revenue from its assets, albeit with room for improvement in asset utilization.
- PE Ratio: With a price-to-earnings ratio of 14.7, Shriram Finance’s stock is valued in relation to its earnings, reflecting market expectations of its future growth and profitability.
- Debt: The company’s total debt stands at ₹1,95,496 crore, indicating a high leverage level with a debt-to-equity ratio of 3.99, which impacts its financial risk profile.
- ROE: Return on equity (ROE) is 15.9%, showcasing Shriram Finance’s effective management in generating profit relative to shareholders’ equity and reflecting strong financial performance.
- EBITDA Margin: The EBITDA margin is 71.4%, highlighting the company’s operational efficiency and strong profitability before accounting for interest, taxes, and depreciation.
- Dividend Yield: Shriram Finance offers a dividend yield of 1.51%, providing shareholders with a return on their investment through dividends, adding to the company’s attractiveness to income-focused investors.
Shriram Finance Stock Performance
Over the past 5 years, the return on investment has been 24%, while it increased to 32% over 3 years and increased to 64% over the past year.
| Period | Return on Investment (%) |
| 5 Years | 24% |
| 3 Years | 32% |
| 1 Year | 64% |
Examples:
1. If A invested ₹1,00,000 over 5 years, the return would be ₹24,000.
2. For a ₹1,00,000 investment over 3 years, the return would be ₹32,000.
3. Investing ₹1,00,000 over 1 year would yield a return of ₹64,000.
Shriram Finance Peer Comparison
Shriram Finance, with a market cap of ₹1,08,783.15 crore, stands out with a robust 1-year return of 59.64%. Compared to competitors, it shows stronger performance, particularly against Bajaj Finance and Jio Financial.
| Sl No. | Name | CMP Rs. | Mar Cap Rs.Cr. | PEG | 3mth return % | 1Yr return % |
| 1 | Bajaj Finance | 6458.5 | 399568.64 | 0.91 | -4.28 | -7.97 |
| 2 | Bajaj Finserv | 1529.15 | 243995.49 | 1.43 | -4.19 | 3.18 |
| 3 | Jio Financial | 320.2 | 203400.7 | -9.82 | ||
| 4 | Cholaman.Inv.&Fn | 1344 | 112919.82 | 1.32 | 6.5 | 29.5 |
| 5 | Shriram Finance | 2895.1 | 108783.15 | 0.62 | 23.79 | 59.64 |
| 6 | Bajaj Holdings | 9390.6 | 104403 | 0.74 | 12.65 | 28.64 |
| 7 | HDFC AMC | 4144.1 | 88452.56 | 2.69 | 7.5 | 66.12 |
Shriram Finance Shareholding Pattern
The shareholding Pattern of Shriram Finance shows fluctuations across quarters. Promoters’ stake decreased from 62.55% to 25.41%, while FII and DII holdings remained relatively stable. Retail & others increased slightly, reflecting changing investment dynamics.
| Jun 2024 | Mar 2024 | Dec 2023 | Sept 2023 | |
| Promoters | 25.41 | 25.42 | 25.43 | 62.55 |
| FII | 54.28 | 53.9 | 53.97 | 12.22 |
| DII | 15.24 | 15.69 | 15.77 | 12.55 |
| Retail & others | 5.07 | 5 | 4.83 | 12.68 |
*All values in %
Shriram Finance History
Shriram Finance, originally incorporated as Shriram Transport Finance Company in 1979 in Chennai, was established by R. Thyagarajan, A.V.S Raja, and T. Jayaraman. Initially focused on providing hire purchase finance for the transport sector, the company catered predominantly to South India, supporting the rapidly growing trucking industry. The company’s strategic focus on financing revenue-generating assets like trucks contributed to its early success.
Throughout the 1980s and 1990s, Shriram Finance expanded its financial offerings and underwent multiple rounds of capital raising, including issuing convertible debentures and equity shares to strengthen its capital base. The company’s consistent growth allowed it to diversify and solidify its presence in the financial services sector. By the 1990s, it began launching new financial products, further establishing itself as a key player in India’s non-banking financial company (NBFC) sector.
In 2022, Shriram Transport Finance Company and Shriram City Union Finance merged to form Shriram Finance Limited, marking a significant milestone in its history. This merger consolidated its position as a comprehensive financial services provider, offering a wide range of products including loans, insurance, and asset management, aimed primarily at serving rural and semi-urban markets across India.
How To Invest In Shriram Finance Ltd Share?
Investing in Shriram Finance Ltd shares is a straightforward process:
- Open a Demat Account: Start by opening a Demat and trading account with a reliable brokerage firm like Alice Blue.
- Complete KYC: Submit necessary documents for KYC verification.
- Fund Your Account: Deposit funds into your trading account.
- Buy Shares: Search for Shriram Finance Ltd shares and place your buy order.
Shriram Finance Limited Fundamental Analysis – FAQs
Shriram Finance Ltd’s fundamental analysis reveals a market capitalization of ₹1,10,789 crore, a PE ratio of 14.7, a debt-to-equity ratio of 3.99, and a return on equity of 25.9%, indicating the company’s robust financial position and market value.
The market capitalization of Shriram Finance is ₹1,10,789 crore. This figure represents the total value of the company’s outstanding shares in the stock market, calculated by multiplying the current share price by the total number of shares outstanding.
Shriram Finance Limited is a leading non-banking financial company (NBFC) in India, offering diverse financial services such as commercial vehicle loans, personal loans, and insurance. It primarily serves rural and semi-urban markets, driving financial inclusion across the country.
Shriram Finance is primarily owned by the Shriram Ownership Trust, which controls a substantial portion of the company’s shares. The Trust, along with key investors like Piramal Group and Sanlam Group, plays a major role in its ownership structure.
The main shareholders of Shriram Finance include the Shriram Ownership Trust, Piramal Group, and Sanlam Group. These entities hold significant stakes in the company, reflecting their strategic interest in Shriram Finance’s diversified financial services across India.
Shriram Finance operates in the financial services industry, specifically as a non-banking financial company (NBFC). It provides a range of financial products, including vehicle loans, personal loans, and insurance, with a focus on rural and semi-urban markets.
To invest in Shriram Finance Ltd shares, open a brokerage account with a registered broker, then search for Shriram Finance on the trading platform. Place a buy order specifying the number of shares and execute the trade.
Determining if Shriram Finance Ltd is overvalued or undervalued requires a comprehensive analysis of its financials, growth prospects, industry trends, and market conditions. Investors should consider metrics like the P/E ratio and PEG ratio, and compare them with industry peers and historical values for a balanced assessment.
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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.
