Prabhudas Lilladher's research report on Shriram Finance
Shriram Finance (SHFL) reported good AUM growth in Q4 (4.6%QoQ/15.9% YoY), led by robust growth in Personal/MSME loans (+6.9%QoQ) The company missed our estimates on profitability and PAT came in at Rs13.08bn(PLe: Rs 17.2bn) on account of one time provision of Rs2.95bn and Rs3bn additional opex due to amortization of intangibles.
Outlook
We continue with our 16% AUM CAGR for FY23-25E but revise our rating to ‘HOLD’ from ‘BUY’ rating as stock has seen a strong rally recently and the results were miss on our estimates with TP of Rs1,486 (unchanged) at 1.3x on Sep’24E PABV. Re-rating can happen if SHFL can keep credit costs under check, while retaining growth momentum in loan book .
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