Stock Market Today- Shriram Finance share price gained 7% in morning trades on Monday, October 28 following strong Q2 performance. The company reported its earnings on Friday after market hours.
Shriram Finance share price opened at ₹3,173.45 on the BSE on Monday, 2.65% higher than the previous close of ₹3,091.40. Shriram Finance share price thereafter went to scale intraday highs of ₹3,309.05, marking gains of 7%.
Shriram Finance's net interest income (NII) for the second quarter ended September 30, 2024, increased by 16.37% and stood at ₹5,606.74 crore as against ₹4,818.18 crore in the same period of the previous year.
The profit after tax (PAT) increased by 18.30% and stood at ₹2,071.26 crore as against ₹1,750.84 crore in the same period of the previous year. The earnings per share (basic) increased by 18.04% and stood at ₹55.09 as against ₹46.67 on a year-on-year (YoY) basis.
Total assets under management (AUM) as on September 30 increased by 19.94% and stood at ₹243,042.55 crore as compared to ₹202,640.96 crore on September 30, 2023, and ₹233,443.63 crore as on June 30, 2024.
Analysts at Motilal Oswal Financial Services said that Shriram Finance has positioned itself to capitalise on its diversified AUM mix, improved access to liabilities, and enhanced cross-selling opportunities.
The monetisation of its stake in Shriram Housing will further help the company improve its capital adequacy and help it engage constructively with credit rating agencies for a credit rating upgrade, it added. MOFSL reiterated ‘Buy’ rating on the stock with a target price of ₹4,000.
Manish Chowdhury, Head of Research, StoxBox said that Shriram Finance has demonstrated robust earnings, highlighted by an 18% annual rise in net profit and growth in AUM (assets under Management). “In the recent quarter, we observed a slight improvement in both the GNPA and NNPA ratios, although there has been a marginal increase in provisions. However, the company experienced compression in its net interest margins (NIMs) during this period,” he said.
Shriram Finance has announced a dividend and a split of shares, reflecting confidence in its financial position, said Chowdhury. Looking ahead, Chowdhury anticipates an improvement in profitability and NIM.
“Furthermore, the stability in new delinquency creation and write-offs, coupled with consistent reductions in Stage-3 and Stage-2 asset levels, indicates a stable credit cost environment. Given these factors, our outlook on SFL remains positive, particularly with the prospect of robust AUM growth,” he added.
Shriram Finance Board declared an Interim Dividend of (220%) ₹22/- per share; the record date for the entitlement thereof has been fixed as November 07, 2024.
Shriram Finance also announced the sub-division/split of 1 (One) fully paid equity share of face value of Rs.10/- (Rupees Ten Only) each held by Members of the Company into 5 (Five) fully paid equity shares of face value of ₹2 (Rupees Two Only) each, subject to the approval of Members of the Company through Postal Ballot. The record date for the purpose of the sub-division/ split of equity shares is yet to be decided and will be announced after obtaining the approval of Members of the Company.
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