Shriram Finance Limited (SHRIRAMFIN) AI Stock Analysis

• Market Cap: ₹1.77T
• Dividend Yield: 1.08%
• Average Volume (3M): 235.05K
• Price to Earnings (P/E): 18.5
• Beta (1Y): 1.43
• Revenue Growth: 21.24%
• EPS Growth: 22.61%
• Country: IN
• Employees: 79,872
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 13.39
• Shares Outstanding: 1,881,565,400
• 10 Day Avg. Volume: 215,751
• 30 Day Avg. Volume: 235,047
• PEG Ratio: 0.42
• Price to Book (P/B): 2.13
• Price to Sales (P/S): 2.95
• P/FCF Ratio: -2.73
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹1,200.00
• Price Target Upside: 18.95% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 47.69
• Revenue Forecast (FY): ₹266.98B

• Rating: 70 Outperform
• Price Target: ₹1,168.00 ▲(15.78% Upside)
• Action: Upgraded Date: 02/10/26
• Date: Action: Upgraded 02/10/26

Overall score reflects strong operating performance and a bullish technical trend, offset by balance-sheet leverage and weak cash flow quality. Valuation is reasonable but not especially compelling given the modest dividend yield.

Positive Factors

Strong Revenue Growth

Substantial year-over-year revenue expansion signals scale gains and sustained demand across the company's core lending products. This growth supports long-term earnings power, enables reinvestment in origination capacity, and strengthens competitive positioning in commercial vehicle, personal and SME lending.

Improving Profitability and Margins

Rising gross and net margins indicate better underwriting and cost management, which can translate to durable profit generation. Improved margin structure enhances resilience to credit costs, allows higher internal capital retention and supports funding of growth without immediate reliance on external equity.

Diversified Product Mix and Distribution

A broad product portfolio and distribution across vehicle finance, personal and SME lending plus insurance commissions reduce revenue concentration. This diversification creates multiple customer touchpoints, cross-sell potential and steadier cash flows across economic cycles, supporting mid-term stability.

Negative Factors

High Leverage Levels

Elevated leverage increases interest expense and refinancing risk, limiting financial flexibility. In a tightening funding environment or rising rates, high debt amplifies earnings sensitivity and constrains capital allocation, making balance-sheet repair and liquidity management priority over the coming months.

Weak Cash Flow Conversion

Negative operating and free cash flow mean reported profits are not translating into cash, forcing reliance on external financing to fund operations and growth. This worsens funding dependence and increases vulnerability to disruptions in debt markets or higher borrowing costs.

Earnings Volatility / Operational Instability

Variable EBITDA points to earnings volatility from credit cycle exposure or uneven cost absorption. Such instability complicates forecasting, stress testing and pricing of new originations, raising execution risk for sustaining margins and disciplined growth over the 2-6 month horizon.

Shriram Finance Limited Business Overview & Revenue Model

Company Description

Shriram Finance Limited, a non-banking finance company, primarily provides commercial vehicle financing services in India. It offers commercial vehicle loans for commercial goods vehicles, passenger vehicles, tractors and farm equipment, and construction equipment. The company also provides business loans; fixed and recurring deposits; and working capital loans, including tyre, tax, fuel, and toll finance, as well as vehicle insurance and repair/top-up loans. In addition, it offers challan discounting services; life and general insurance products; consumer finance services; emergency credit line guarantee schemes; stock broking services; and chit and mutual funds. As of March 31, 2022, it operated a network of 1,854 branches. The company also offers its products through 775 rural centers; and partnerships with 500 private financiers. It primarily serves first time buyers, driver-turned-owners, and small road transport operators. The company was formerly known as Shriram Transport Finance Company Limited and changed its name to Shriram Finance Limited in November 2022. Shriram Finance Limited was incorporated in 1979 and is headquartered in Mumbai, India.

How the Company Makes Money

Shriram Finance generates revenue through multiple streams, primarily from interest income on loans provided to customers. The company finances commercial vehicles, personal loans, and SME loans, charging interest rates that reflect the risk associated with each customer segment. Additionally, Shriram Finance earns fees from processing loan applications and other financial services. Insurance products, offered in partnership with insurance providers, also contribute to the revenue through commissions and service fees. The company's extensive network and strong brand reputation allow it to maintain a steady flow of customers, thereby enhancing its earnings potential.

Shriram Finance Limited Financial Statement Overview

Summary

Strong revenue and profit growth with improved margins, but the score is held back by high leverage on the balance sheet and weak cash generation (negative operating/free cash flow and poor cash conversion).

Income Statement

Shriram Finance Limited has shown notable revenue growth from ₹161.13 billion in 2024 to ₹411.24 billion in 2025. The net profit margin improved significantly, indicating enhanced profitability. Gross profit margin also increased, highlighting better cost management. However, fluctuating EBITDA over the years suggests some operational instability.

Balance Sheet

The company's debt-to-equity ratio remains high due to substantial total debt levels, which may pose financial risks. However, the equity ratio indicates a stable capital structure. Return on Equity has improved, reflecting better utilization of shareholder funds. Overall, the balance sheet shows a mix of financial leverage and improved shareholder returns.

Cash Flow

Shriram Finance has faced challenges in generating positive operating cash flow, resulting in negative free cash flow. The free cash flow to net income ratio is unfavorable, indicating potential issues in converting income into cash. However, financing activities have provided necessary liquidity, albeit with an increased debt load.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	445.19B	406.43B	338.86B	298.62B	192.88B	166.83B
Gross Profit	232.76B	221.88B	190.83B	169.31B	95.53B	76.28B
EBITDA	151.18B	131.48B	102.52B	88.14B	36.85B	34.15B
Net Income	98.64B	95.54B	73.66B	60.11B	27.21B	24.99B
Balance Sheet
Total Assets	2.99T	2.94T	2.48T	2.11T	1.42T	1.30T
Cash, Cash Equivalents and Short-Term Investments	102.02B	197.79B	111.73B	104.90B	112.88B	114.49B
Total Debt	1.69T	1.78T	1.51T	1.29T	929.19B	903.66B
Total Liabilities	2.39T	2.37T	1.99T	1.67T	1.16T	1.08T
Stockholders Equity	606.03B	564.70B	489.47B	435.13B	260.94B	217.17B
Cash Flow
Free Cash Flow	-43.04B	-439.07B	-313.67B	-178.22B	-88.95B	-42.65B
Operating Cash Flow	-41.98B	-436.83B	-311.01B	-176.25B	-88.59B	-42.39B
Investing Cash Flow	-1.60B	36.61B	-2.58B	-1.93B	-343.30M	-248.90M
Financing Cash Flow	-36.23B	445.21B	276.09B	118.20B	85.05B	122.26B

Shriram Finance Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1008.80
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SHRIRAMFIN, the sentiment is Negative. The current price of 1008.8 is below the 20-day moving average (MA) of 1029.44, below the 50-day MA of 1021.88, and above the 200-day MA of 790.16, indicating a neutral trend. The MACD of -15.70 indicates Positive momentum. The RSI at 37.76 is Neutral, neither overbought nor oversold. The STOCH value of 27.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:SHRIRAMFIN.

Shriram Finance Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHOLAFIN	73 Outperform	₹1.23T	27.83	―	0.12%	27.30%	20.42%
MAHABANK	71 Outperform	₹502.57B	6.63	―	2.60%	18.36%	14.53%
SHRIRAMFIN	70 Outperform	₹1.77T	18.52	―	1.08%	21.24%	22.61%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
MFSL	59 Neutral	₹565.37B	390.61	―	―	-16.19%	-53.19%
LICHSGFIN	55 Neutral	₹267.36B	5.31	―	1.87%	4.79%	13.08%
MANAPPURAM	49 Neutral	₹219.40B	27.09	―	0.80%	-3.68%	-80.12%

Shriram Finance Limited Corporate Events

Shriram Finance Faces Rs 93.82 Lakh GST Demand and Penalty in Tamil Nadu

Shriram Finance Limited has disclosed that the Commercial Tax Officer, Chennai South, has levied a tax demand and corresponding penalty totaling Rs 93.82 lakh for FY 2022-23, arising from disallowance of input tax credit on reverse charge mechanism payments and issues related to credit notes pertaining to the erstwhile Shriram City Union Finance, now merged into the company. The company stated that the order, passed under provisions of the Central, Tamil Nadu, and Integrated GST Acts, is not expected to have any material impact on its financials or operations, and it is in the process of obtaining a tax consultant’s opinion before deciding its next course of action, signaling a limited immediate risk for stakeholders but highlighting ongoing scrutiny of GST compliance in the financial services sector.

Shriram Finance Faces GST Penalty Orders Linked to Amalgamated Entity

Shriram Finance Limited has disclosed that the Office of the Commercial Tax Officer, Chennai South, has issued orders levying tax and equal penalty demands totaling Rs 1.05 crore for FY 2020-21 and Rs 50.35 lakh for FY 2021-22, arising from alleged wrongful input tax credit on reverse charge mechanism payments and issues related to credit notes pertaining to the erstwhile Shriram City Union Finance Limited. The company has stated that these GST-related demands and penalties, issued under the Central, Tamil Nadu and Integrated Goods and Services Tax Acts, are not expected to have a material impact on its financial or operational performance, and it is seeking expert tax advice on the Tamil Nadu state demand orders as a matter of commercial prudence, a step closely watched by investors for any potential contingent liability implications.

Shriram Finance Gains S&P Upgrade to Investment-Grade BBB- Rating

Shriram Finance Limited announced that S&P Global Ratings has upgraded the company’s long-term issuer credit rating and senior secured debt rating to BBB-/Stable from BB+/Stable, and its short-term issuer credit rating to A-3 from B. The move to investment-grade territory signals an improvement in the company’s credit profile and risk perception, which could lower its funding costs, enhance market confidence, and strengthen its position among domestic and international lenders and investors.

Moody’s Turns Positive on Shriram Finance as MUFG Stake Bolsters Capital and Outlook

Moody’s Ratings has affirmed Shriram Finance Limited’s Ba1 long-term corporate family rating and revised its outlook on the company to positive from stable, reflecting expectations of a stronger business and financial profile. The outlook change is driven by MUFG Bank’s planned acquisition of a 20% stake in Shriram Finance via a substantial preferential share issue, which is expected to materially boost capitalization, enhance access to onshore and offshore funding, and improve funding diversity and risk management. On a pro forma basis, the capital infusion is projected to lift the firm’s tangible common equity to tangible managed assets ratio to above 29% from about 19%, with Moody’s expecting it to remain above 20% over the next four to five years, while profitability is anticipated to improve as funding costs decline and access to funding strengthens. Moody’s also expects Shriram Finance’s asset quality to stay stable, and notes that a future rating upgrade would depend on sustained profitability improvements, strong capital metrics and stable asset quality, although explicit affiliate support from MUFG is not currently factored into the rating.

Shriram Finance Reports All Physical Share Re-Lodgement Requests Rejected Under SEBI Special Window

Shriram Finance Limited has disclosed the outcome of a special window, mandated by a recent SEBI circular, for re-lodgement of transfer requests of physical shares between 7 July 2025 and 6 January 2026. During this period, its registrar, Integrated Registry Management Services, received four such transfer requests, all of which were ultimately rejected because the transferees failed to provide authentic proof of beneficial ownership and submitted documents with technical deficiencies, leaving no physical share transfer requests approved as of the reporting date.

Shriram Finance files business update call transcript with exchanges

Shriram Finance Limited has submitted to the stock exchanges the transcript of its December 30, 2025 business update conference call, following an earlier disclosure of the call’s audio link. The company has also made the transcript available on its website, enhancing transparency and access to its management’s latest commentary for investors and other stakeholders.

Shriram Finance Secures CARE AAA Rating for Fixed Deposit Programme

Shriram Finance Limited has received a top-tier credit rating of ‘CARE AAA; Stable’ from CARE Ratings Limited for its fixed deposit programme, indicating the highest degree of safety regarding timely servicing of financial obligations. The new rating, formally communicated on 30 December 2025, enhances the company’s funding profile and is likely to strengthen investor confidence in its deposit schemes, supporting its ability to mobilise retail funds while reinforcing its standing in the Indian non-banking financial sector.

Shriram Finance Declares 240% Interim Dividend for FY 2025-26

Shriram Finance Limited has announced the payout of an interim dividend of 240%, equating to Rs.4.80 per equity share, for the financial year 2025-26. This dividend, declared by the Board of Directors on October 31, 2025, has been distributed to eligible members as of November 17, 2025, marking a significant return to shareholders and reflecting the company’s robust financial health.