Shriram Finance Share Price Gain 5% on Strong Outlook

On Tuesday, Shriram Finance share price surged 5% to ₹648.45 on the BSE during intra-day trade, backed by strong volumes. This rise helped the stock recover most of its recent losses of 6% over the past 3 trading sessions. The stock had earlier touched a 52-week high of ₹730.43 on September 27, 2024.

At 10:14 AM, Shriram Finance was the top gainer in the Nifty Financial Services Index, which was up 1.6%. Meanwhile, the benchmark Nifty 50 also gained 1.62%.

Outperforming the Market

Shriram Finance has outperformed broader markets in recent times. In the past week, it gained 1%, whereas the Nifty 50 declined by 3.3%. Over the last 3 months, the stock has risen by 11%, while the benchmark index has fallen by 5.4%.

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About Shriram Finance

Shriram Finance is the flagship company of the Shriram Group, which has a presence in consumer finance, life insurance, general insurance, stock broking, and distribution businesses. It is one of India’s largest retail asset financing Non-Banking Finance Companies (NBFCs), with Assets Under Management (AUM) exceeding ₹2.54 trillion.

The company operates a vertically integrated business model and provides financing for:

• Commercial vehicles (passenger and goods transport)

• MSME loans (micro, small, and medium enterprises)

• Farm equipment and tractors

• Gold loans, personal loans, and working capital loans

Credit Rating Upgrade

On March 18, 2025, S&P Global Ratings upgraded Shriram Finance’s credit rating from ‘BB/B’ to ‘BB+/B’, reflecting its belief that the company will benefit from a stronger regulatory environment for top-tier financial companies in India.

The agency expects Shriram Finance to maintain its leadership in the used-commercial vehicle segment, supported by:

• Long-standing relationships with borrowers

• Deep market knowledge

• Strong presence in rural and semi-urban areas

Growth Outlook and Asset Quality

Shriram Finance operates in high-risk, high-return segments, catering to low-income, underbanked customers in rural India. However, India’s economic growth is expected to support the company’s asset quality.

S&P Global Ratings predicts that:

• Credit costs will improve slightly to 1.9% of average loans in the next two years (compared to 2.1% currently).

• Non-performing loans and credit costs will remain higher than peers due to the financial vulnerability of its borrowers.

• Loan growth is expected at 17%-19% over the next two years, while its capital base will remain strong.

• The company’s Risk-Adjusted Capital (RAC) ratio is estimated to be between 13.5% and 14% in the coming years.

Shriram Finance is focusing on steady, sustainable growth, avoiding overly aggressive expansion. Management remains confident in maintaining stable asset quality in its commercial vehicle loan portfolio while keeping credit costs in check.

Conclusion

With a stable financial outlook, diversified portfolio, and leadership in the used-commercial vehicle market, Shriram Finance is positioned for steady growth. The recent rating upgrade and the company’s strong market presence further boost investor confidence.

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