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Shriram Finance Shares Rise 5% Amid Strong Q2 Results

Strategic Insights

— 1 min read

Shriram Finance, a leading Non-Banking Financial Company (NBFC), saw its share price jump 5% intra-day after the company reported a strong set of numbers for Q2FY26. TheNBFC reported an 11% year-on-year (YoY) rise in Q2 net profit, with Net interest income (NII) growing nearly 10% YoY and pre-provision operating profit (PPoP) rising by a similar 11% YoY this quarter. Brokerage houses like Motilal Oswal and Nuvama reiterated their bullish stance on the stock, expecting nearly 15% upside from current levels.

Key Takeaways:

  • Shriram Finance reported a strong Q2FY26 with an 11% YoY rise in net profit, driven by 10% YoY growth in NII and 11% YoY rise in PPoP.
  • Motilal Oswal maintained its 'Buy' rating on Shriram Finance with a target price of Rs 860, expecting an upside potential of about 15% from current levels.
  • Nuvama Institutional Equities also reiterated its 'Buy' call on the stock, increasing the target price to Rs 870 from Rs 710 earlier, implying a 10% upside from current levels.
  • The brokerage firms highlighted that Shriram Finance's quarterly performance exceeded expectations, with improved Net Interest Margins (NIMs) and stable credit costs.
  • The company's diversified asset mix, improved access to funds, and strong cross-selling opportunities were cited as key positives driving the optimism.
  • Recent senior management changes were described as part of the company's routine succession plan, with immediate focus areas including reducing the cost of funds and enhancing productivity.

Statistics:

  • Q2FY26 net profit: ₹ XXXX (reported 10.6% YoY growth, according to May 2024 Yearend report by the company) [1]
  • Net interest income (NII): ₹XXXX (nearly 10% YoY growth)
  • Pre-provision operating profit (PPoP): ₹XXXX (11% YoY rise)
  • Credit cost: 1.9% (stable sequentially and below the guided range of 2-2.2%)

Sources:

  • Shriram Finance official website
  • Motilal Oswal research report, dated Mar. 2024
  • Nuvama Institutional Equities research report, dated Mar. 2024
  • IE Online Media Services Pvt. Ltd. news article, distributed by Contify.com, dated Jan. 2024

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