Shriram Finance zooms 34%, hits new high; analysts retain bullish outlook

Shriram Finance share price today

 

Shriram Finance shares hit a new high of ₹839.45 per share on the BSE today, gaining 2 per cent in Monday's intraday trade, on a healthy business outlook. The stock surpassed its previous high of ₹838.20, which it touched on November 12, 2025.

 

In the past two months, the stock price of the non-banking finance company (NBFC) has surged 34 per cent after it reported a steady performance in the September 2025 quarter (Q2FY26). The stock has zoomed 70 per cent from its 52-week low of ₹493.60, touched on January 1, 2025.

 

What's driving Shriram Finance stock price?

 

Shriram Finance is the flagship company of the Shriram group which has a significant presence in consumer finance, life insurance, general insurance, housing finance, and stock broking and distribution businesses. Shriram Finance is one of India's largest retail asset financing NBFCs with Assets under Management (AUM) above ₹2.81 trillion.

 

Shriram Finance reported a steady performance in Q2FY26 with disbursement growth and asset quality trends broadly stable.

 

Disbursements grew by 10.2 per cent year-on-year (Y-o-Y) to ₹49,019 crore, while AUM increased by 15.7 per cent Y-o-Y to ₹2.8 trillion.

 

Net interest income (NII) rose 11.7 per cent Y-o-Y to ₹6,266 crore, with margins inching up 8 bps quarter-on-quarter (Q-o-Q) amid utilisation of excess liquidity. Incremental cost of funds eased to 8.07 per cent, aiding reduction in overall borrowing cost.

 

That apart, the demand for two-wheelers in the month of October turned out to be extremely good, and the management expects the momentum to continue, It also expects good growth for Q3FY26, leading to an additional 2 per cent AUM growth in H2FY26. 

Brokerage views on Shriram Finance

 

Going ahead, a gradual improvement is anticipated in margins at ~8.5 per cent (by the end of FY26) led by liquidity normalisation to a 3-month coverage, funding mix optimisation, and gradual repricing of liabilities.

 

With liquidity coverage ratio (LCR) at 297 per cent, improving leverage at 3.9x, and diversified sourcing of funds position margins for structural improvement, according to ICICI Securities. The brokerage firm has a 'Buy' rating on the stock with a share price target at ₹880 (earlier ₹725).

 

"Disbursements in Q2FY26 were soft (less than 10 per cent Y-o-Y/Q-o-Q) across vehicle financiers because of seasonality and delayed purchases due to the Goods and Services Tax (GST) rate cut, although demand rebounded sharply from October 2025, with the momentum continuing in passenger vehicles and small/light commercial vehicles. Used-vehicle demand has strengthened as the inventory improved," according to analysts at InCred Equities.

 

The brokerage firm has retained Shriram Finance in its 'high-conviction stocks' list with an 'ADD' rating and a target price of ₹870, valuing the stock at ~2.1x FY27F BV.

 

Shriram Finance is ramping up new vehicle loans and is gaining traction in used vehicles with an equal focus on non-vehicle financing by all lenders. Credit costs remained flattish Q-o-Q (excl. MMFS) in Q2 with NIM improvement Q-o-Q. Both are expected to improve further in H2FY26, InCred analysts said. 

 

As two-wheeler sales generally pick up with the onset of the festive season in H2, CareEdge Ratings anticipates the FY26 sales growth to be in the 6-7 per cent range driven by expectation of improved rural incomes considering above-normal monsoon and higher sales in H2 post GST cut from 28 per cent to 18 per cent on September 22, 2025, for 2W with engine capacity up to 350 cc.

 

Looking ahead, CareEdge Ratings anticipates that NBFCs will continue to lead the 2W financing market as the banks remain focussed on relatively less risky asset classes.

   

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Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.