There has been a great rise in the stock of Shriram Transport Finance Company. Today the stock on NSE rose 6.5 percent to reach a price of Rs 1246. Whereas on January 25 it closed at Rs 1167.
Shriram Transport Finance Company Stock Price: In today’s business, there has been a great rise in the stock of Shriram Transport Finance Company. Today the stock on NSE rose 6.5 percent to reach a price of Rs 1246. Whereas on January 25 it closed at Rs 1167. On January 25, the company had released the results for the December quarter, after which positive movement is being seen in the stock today. The company’s profits have come down in the December quarter, even after this the stock saw a rise. At the same time, after the results, some brokerage houses have given investment advice in this. If we look at the target of the brokerage house, it can give 35 to 36 percent return from the last closing price.
What is positive for the company
Brokerage house Emkay Global says that Shriram Transport Finance Company has made a profit of 680 crores in the December quarter, which is less than our estimate of 820 crores. Whereas the preprovision operating income has been around 8 per cent higher than the estimate. Disbursement has picked up pace and margins are also showing improvement. The focus of the company is on growth.
The brokerage house says that the company is the leader in pre-owned CV segment financing and in this case has 25 percent market share in the CV market. The company’s growth, risk profile and return potential are strongly linked to this segment. The company has to merge with SCUF further, which is positive. Further, the credit rating profile of the company is expected to improve. While recommending investment in the stock, the brokerage house has given a target of Rs 1580.
Expected growth in AUM
Brokerage house CLSA has also given buying opinion in the stock and has given a target of Rs 1600. The brokerage house says that the growth in AUM of Shriram Transport Finance Company has been as expected. Net Interest Income (NII) has also seen growth as expected. While profits have been weaker than expected. The better thing is that the NPA of the company has reduced by 20 bps on a quarterly basis. The merger with the group company is positive. However, CLSA has cut the estimate for FY22 by 11 per cent due to higher credit cost.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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