Buy Shriram Finance; target of Rs 1225: ICICI Securities

ICICI Securities is bullish on Shriram Finance recommended buy rating on the stock with a target price of Rs 1225 in its research report dated December 31, 2025.

Broker Research

December 31, 2025 / 11:26 IST

Buy

ICICI Securities research report on Shriram Finance

Shriram Finance (SFL) is likely to emerge as a leader in the NBFC space in the next five years with structurally better profitability. Management highlighted that it expects a 100bps reduction in cost of borrowing (CoB) over the next 2–3 years and it would utilise the same to retain/acquire new customers. It plans to accelerate credit growth to 20%, from the current levels of 16–17%, over the next five years with an upward bias. With better customer profile and incremental growth driven by low-risk products – new vehicles, gold loans, etc. – it expects ~10–20bps of reduction in steady-state credit cost. Overall, it expects long-term RoA to expand to 3.6% vs. 2.7–2.8% currently. Maintain BUY.

Outlook

SFL plans to double its new vehicle portfolio (currently 3%) over the next three years, focussing on existing customers; it does not intend to enter open market. Retain BUY and the TP of INR 1,225 (unchanged), valuing SFL at 2.5x FY27E BVPS.

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