Motilal Oswal's research report on Shriram Finance
Shriram Finance (SHFL), the merged entity of Shriram Transport Finance (SHTF) and Shriram City Union Finance (SCUF), has emerged as a stronger player in all its product segments. With a more diversified AUM mix and better access to liabilities, SHFL is effectively driving cross-selling of non-vehicle products to its customers.
Outlook
The merged entity, in our view, has emerged stronger than the respective standalone businesses of SHTF and SCUF. It continues to leverage the expanded distribution network to offer a much wider product bouquet to its customers. SHFL will continue to execute well to deliver a CAGR of 17% in AUM and a CAGR of 19% in PAT over FY24-26E. This translates into RoA/RoE of 3.3%/17% in FY26E. We maintain our BUY rating on the stock with a TP of INR 2,900 (premised on 1.7x FY26E standalone BV).
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