Buy Shriram City Union Finance; target of Rs 2254: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities's research report on Shriram City Union Finance

We believe SCUF is in a sweet spot with a sizeable skew towards SME lending given  the  governments focus on this segment. Geographical expansion (~68% of  branches in south) and deeper penetration will provide a further fillip to  growth.  We  expect  RoAA  to  improve  56bps  over FY18-20E (3.04%) as efficiencies  kick  in.

Outlook

We  factor  in  elevated provision (373bps over FY18-20E) and refrain from reinstating our previous multiple of 2.5x given the  ambiguity  around the SVL exposure (Rs 4.5bn). Maintain BUY with TP of Rs 2,254 (2.25x Mar-20E ABV of Rs 1,102).

For all recommendations report, click here

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