Buy Shriram Transport; target of Rs 1200: P Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's report on Shriram Transport Finance Corporation (STFC)

"SHTF reported Q3FY15 PAT at Rs 3.12bn (PLe: Rs3.22bn) affected by elevated credit costs even as NII growth (excl. securitization income) stood at impressive 43% YoY. Reported margins increased by 4bp QoQ to 6.64% as borrowing costs moderated. Disbursements grew by 39% YoY led by strong traction in used vehicle financing while the new vehicle financing also reported a sharp rise on a low-base. Overall AUMs grew at 8% YoY dragged by the run-down in the new CV book and decline in offbalance sheet book. We believe that the growth prospects are likely to improve over FY16 on a combination of improving economy and regional demand levers in certain pockets, while benign funding cost will further aid margin improvement. We maintain our BUY rating with PT of Rs 1200 based on 2.3x Sep-16E ABV", says Prabhudas Lilladher research report.

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