At a Glance
Shriram Finance isn’t flashy like Bajaj Finance or cryptic like SBI Cards. It’s a straight-up profit machine hauling cash down India’s dusty highways. With a 27% profit CAGR, 1.5% dividend yield, and ROE flirting with 16%, this NBFC giant is less Bollywood, more Maruti Van – reliable AF. And unlike your IPO picks, this one actually makes money.
1. 🏦 The Business: Old-School NBFC, New-School Scale
- Founded in 1979.
- India’s largest retail asset financing NBFC.
- Specializes in:
- 🛻 Pre-owned truck financing
- 🏠 Housing finance (via Shriram Housing)
- 🛵 Two-wheeler loans
- 🧾 SME and gold loans
- 🪙 Fixed deposit schemes (yes, the aunties love them)
- ⚙️ Network: 1,758 branches + 831 rural centres
🧠 Target customer? Small road transport operators, traders, and MSMEs. Aka – the unbanked, the underserved, the real India.
2. 💰 Financials – Big Numbers, Bigger Momentum
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 17,422 | 19,255 | 30,492 | 36,388 | 41,834 |
| Net Profit (₹ Cr) | 2,499 | 2,721 | 6,020 | 7,399 | 9,576 |
| EPS (₹) | 17.71 | 20.12 | 32.11 | 39.20 | 50.81 |
| Dividend Payout % | 18% | 20% | 22% | 23% | 19% |
| ROE % | 13% | 11% | 17% | 16% | 16% |
📈 Profit CAGR (5Y): 27%
📈 Sales CAGR (3Y): 30%
🎯 EPS growth since FY21: ~3x
📉 P/E: Just 15x (yes, in this market)
3. 🧾 Quarterly Profits – Every Quarter, More Diesel in the Tank
| Quarter | Net Profit (₹ Cr) | YoY Growth |
|---|---|---|
| Mar ’24 | ₹2,021 | +57% |
| Jun ’24 | ₹2,031 | +18% |
| Sep ’24 | ₹2,153 | +20% |
| Dec ’24 | ₹3,249 | MASSIVE (base effect from tax benefit) |
| Mar ’25 | ₹2,144 | +6% |
EPS now runs at ₹11.40–₹17 per quarter. That’s ₹50+ EPS annualized, not some PLI-pumped fairy tale.
4. 🔍 Why Market Isn’t Pricing This Beast Like Bajaj?
Let’s compare:
| NBFC | P/E | ROE | Dividend Yield | Net Profit (Qtr) | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Shriram Finance | 15.3 | 15.8% | 1.46% | ₹2,144 Cr | ₹1,27,000 Cr |
| Bajaj Finance | 34.2 | 22% | 0.48% | ₹4,545 Cr | ₹5,69,000 Cr |
| Cholamandalam Inv | 31.5 | 18% | 0.13% | ₹1,259 Cr | ₹1,34,500 Cr |
| L&T Finance | 18.9 | 8.7% | 1.37% | ₹635 Cr | ₹49,900 Cr |
💡 Shriram makes more profit than Chola + L&T combined, and yet gets lesser valuation.
Why?
- ❌ Less flashy business (used trucks ≠ fintech dreams)
- ❌ Southern focus
- ❌ Legacy perception (old-school brand, not Gen Z-friendly)
- ✅ But consistent, reliable, and VERY profitable
5. 🧱 Balance Sheet – Boringly Solid
- 🧾 Borrowings up from ₹94K Cr (FY20) → ₹2.34 Lakh Cr (FY25)
- 🧱 Networth = ₹56,094 Cr
- 🧮 Leverage remains under control, with gross NPAs within range (below 6%)
- 💼 Book value = ₹300 per share
- 🔧 Interest income rising steadily while margins are fat (Financing margin ~28%)
Also – most NBFCs bleed cash from ops.
Shriram does too. But unlike others, it translates it into assets and profits, not press releases.
6. 📊 Shareholding – FIIs Can’t Get Enough
| Category | % (Mar 2025) |
|---|---|
| Promoters | 25.39% |
| FIIs | 53.58% |
| DIIs | 15.34% |
| Public | 5.68% |
From 49.97% to 53.6% – FIIs are gobbling up shares like it’s Diwali sale at Croma.
Retail investors? Still under 6%.
Which means… 🧠 You’re probably missing out.
7. 💸 Fair Value: Let’s Do the Math
- FY25 EPS = ₹50.81
- Fair P/E Range = 15–18× (conservative to peer-aligned)
📈 FV Range = ₹760 – ₹915
At CMP ₹676 – stock is still undervalued by 12–35%, depending on how much love the market gives to used trucks and southern balance sheets.
🏁 TL;DR – Shriram Finance in One Line
A profit-spewing NBFC that doesn’t trend on Twitter but delivers like a BharatBenz on NH44.
🚦Verdict: Underowned. Underhyped. Undervalued.
✅ BUY if:
- You want serious EPS compounding without drama
- You like dividends AND growth
- You believe FIIs aren’t fools
❌ Avoid if:
- You prefer flashy NBFCs with TV ads and IPOs every 3 years
- You think “used commercial vehicle financing” isn’t sexy enough
✍️ Written by Prashant | 📅 June 25, 2025
🏷️ shriram finance, nbfc, bajaj finance peers, used truck loans, asset financing, eduinvesting, undervalued compounder, high roe stocks
