Shriram Finance is the uncle of Indian NBFCs—sitting on ₹2.6 trillion AUM, lending on everything from rusty trucks to shiny EVs, and still finding time to launch a “super app” because, apparently, everyone needs one in 2025. At ₹1.12 lakh crore market cap and 13x P/E, it’s cheaper than Bajaj Finance on paper, but carries more baggage than your favorite budget airline.
2. Introduction
Once upon a time, this was Shriram Transport Finance, your friendly neighborhood truck financier. Fast forward, and today it’s the financial kirana store of Bharat—loans for CVs, PVs, MSMEs, tractors, gold, personal use, and even for that Ola scooter you regret booking.
Shriram Finance is now the flagship of the Shriram Group, rubbing shoulders with cousins in insurance, broking, and housing. With 3,220 branches and over 61,000 employees, it claims to serve 9.56 million customers. Half of them probably didn’t realize they were customers until the EMI message came.
In FY25, it cleaned up its book: GNPA down to 4.5% from 6.2%. That’s like an engineering student who goes from 3 backlogs to just 1. At the same time, it kept NIM steady at 8.5%—healthy, considering every bank is fighting for deposits like there’s a gold rush.
Divesting Shriram Housing Finance to Warburg Pincus for ₹3,929 Cr freed up some capital, while green finance tie-ups with Bajaj, TVS, Ather, Ola, etc. is its attempt at showing ESG credentials. Because nothing screams “green” like a company that made its fortune funding diesel trucks.
3. Business Model – WTF Do They Even Do?
Shriram Finance is a vertically integrated NBFC monster:
Commercial Vehicles (45%) – Still the core, still the breadwinner.
Passenger Vehicles (20.5%) – The new darling. Everyone wants a car loan, especially when Ola/Uber rates go mad.
MSME Loans (14.2%) – Targeting the kirana + workshop + small trader crowd.
Farm & Construction Equipment (9%) – Because even tractors and JCBs need financing.
Gold Loans (1.8%) – Just to remind Muthoot and Manappuram they’re not special.
Personal Loans (3.6%) – Because why not, everyone else is doing it.
On the liability side, it’s juggling borrowings of ₹2.34 lakh crore—funded by public deposits (24%), NCDs (16%), securitisation (16%), term loans (21%), and the odd ECB. Basically, it borrows from everyone except your local chit fund.
And yes, there’s the Shriram One Super App—a single window for loans, insurance, investments. It has 10M+ downloads. Whether people use it beyond checking EMI dates is another story.
4. Financials Overview
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
11,536
9,605
11,454
20.1%
0.7%
PAT
2,159
2,031
2,144
6.3%
0.7%
EPS (₹)
11.5
10.8
11.4
6.5%
0.9%
Comment: Growth is decent, but EPS looks like it’s on cruise control. Annualized EPS ≈ ₹51.5 → PE ~13.2x. Bajaj Finance is trading at 33x. Either Bajaj is overpriced, or Shriram is the “Big Bazaar discount” of NBFCs.
5. Valuation – Fair Value Range Only
P/E Method: EPS ₹51.5, sector PE 18–25x → Fair value = ₹925–₹1,290.
EV/EBITDA: EV ₹3,25,075 Cr / EBITDA ~₹31,500 Cr (FY25 est.) ≈ 10.3x; sector ~12–14x → Fair value ₹650–₹750.
Fair Value Range: ₹650 – ₹1,250/share Disclaimer: For educational purposes only. Not investment advice.
6. What’s Cooking – News, Triggers, Drama
Green Finance Push: Tie-ups with Hero, Ather, Ola, etc. aiming ₹5,000 Cr EV AUM in 3–4 years. Basically, funding scooters that promise 150 km range but die at 60 km.
Divestment Done: Housing finance stake sold to Warburg. Now lighter, leaner, and maybe more focused.
Borrowings: Just did an NCD buyback of ₹332 Cr—cleanup act to impress rating agencies.
