Shriram Finance shares surged by over 7% in early trading on October 28, 2024, after the company posted solid Q2 earnings and declared a 220% interim dividend. Opening at ₹3,173.45 on the BSE, the stock rose to an intraday high of ₹3,309.05, reflecting growing investor confidence in Shriram’s robust financial health.
Q2 Financial Highlights
Key Financial Metrics
For the quarter ending September 30, 2024, Shriram Finance reported a 16.37% increase in Net Interest Income (NII) and an 18.30% rise in net profit, demonstrating effective growth in its core operations.
| Financial Metric | Q2 FY2023 | Q2 FY2024 | Growth (%) |
|---|---|---|---|
| Net Interest Income (NII) | ₹4,818.18 Cr | ₹5,606.74 Cr | 16.37% |
| Net Profit | ₹1,750.84 Cr | ₹2,071.26 Cr | 18.30% |
| Earnings Per Share (EPS) | ₹46.67 | ₹55.09 | 18.04% |
| Assets Under Management (AUM) | ₹202,640.96 Cr | ₹243,042.55 Cr | 19.94% |
Dividend Announcement & Stock Split
In addition to the strong earnings, Shriram Finance declared a significant 220% interim dividend, amounting to ₹22 per share. The dividend record date is set for November 7, 2024, which further boosts investor sentiment.
Analysts suggest this dividend declaration is indicative of Shriram Finance’s strong financial footing and commitment to shareholder returns.
Analysts’ Insights
Leading brokerages like Motilal Financial Services and StoxBox have issued positive reviews of Shriram Finance, citing its diversified Asset Under Management (AUM) mix and improved capital adequacy due to the monetization of its stake in Shriram Housing.
Motilal Oswal has reiterated a ‘Buy’ rating for Shriram Finance with a target price of ₹4,000, seeing potential for further stock appreciation based on AUM growth and capital strategy.
Analyst Ratings:
| Brokerage Firm | Rating | Target Price (₹) |
|---|---|---|
| Motilal Financial Services | Buy | 4,000 |
| StoxBox | Buy | 3,800 |
Growth Drivers and Market Position
Shriram Finance’s diversified financial portfolio and its focus on cross-selling have enhanced its resilience in a fluctuating market. The company’s consistent asset growth, stable GNPA (Gross Non-Performing Assets), and NNPA (Net Non-Performing Assets) have strengthened its credit profile, creating opportunities for a future credit rating upgrade.
Investment Consideration
Shriram Finance’s robust performance and strong dividend announcement make it an attractive option for both growth and income-focused investors. However, investors should remain aware of broader market fluctuations, regulatory changes, and potential shifts in credit quality as influencing factors.
Disclaimer
This article is for informational purposes only and should not be considered financial advice. Investors are advised to perform their own research or consult with a financial expert.