Current Rating Overview
Shriram Finance Ltd’s current 'Buy' rating is supported by a Mojo Score of 72.0, reflecting a positive outlook on the stock’s potential. This score represents a 4-point increase from the previous 68, which corresponded to a 'Hold' rating. The upgrade to 'Buy' signals that the company’s fundamentals and market position have strengthened sufficiently to recommend accumulation for investors seeking growth in the Non Banking Financial Company (NBFC) sector.
Quality Assessment
As of 27 December 2025, Shriram Finance Ltd maintains a 'good' quality grade, underpinned by strong long-term fundamental strength. The company boasts an average Return on Equity (ROE) of 14.00%, indicating efficient utilisation of shareholder capital to generate profits. This level of ROE is a positive indicator for investors, suggesting sustainable earnings generation and effective management.
The company has demonstrated healthy growth trends, with net sales expanding at an annual rate of 22.00% and operating profit growing at 22.80%. These figures highlight robust operational performance and the ability to scale revenue and profitability consistently. Furthermore, Shriram Finance has reported positive results for eight consecutive quarters, with quarterly net sales reaching a peak of ₹11,912.44 crores and PBDIT hitting ₹8,803.40 crores, reinforcing its strong market position.
Valuation Considerations
Despite the strong fundamentals, the valuation grade for Shriram Finance Ltd is currently classified as 'expensive'. This suggests that the stock trades at a premium relative to its earnings and sector peers. Investors should be aware that while the company’s growth prospects justify a higher valuation, the premium pricing may limit upside potential in the short term and warrants careful monitoring of market conditions and company performance.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend
The financial grade for Shriram Finance Ltd is rated 'positive', reflecting a favourable trajectory in key financial metrics. The company’s consistent quarterly performance, including the highest recorded Profit Before Tax (PBT) less other income of ₹3,104.12 crores, demonstrates operational resilience and effective cost management. This positive trend is further supported by high institutional holdings at 68.27%, indicating strong confidence from sophisticated investors who typically conduct rigorous fundamental analysis before committing capital.
Additionally, the stock has delivered impressive returns over various time frames as of 27 December 2025: a 1-day decline of -1.42% notwithstanding, it has gained +6.42% over the past week, +11.95% in the last month, and an outstanding +58.42% over three months. The six-month and year-to-date returns stand at +36.37% and +65.73% respectively, with a 1-year return of +63.77%. These figures highlight the stock’s strong momentum and ability to outperform broader indices such as the BSE500 consistently over the last three years.
Technical Outlook
The technical grade for Shriram Finance Ltd is 'bullish', signalling positive price action and favourable market sentiment. This technical strength complements the company’s fundamental robustness, suggesting that the stock is well-positioned for further appreciation. Investors who incorporate technical analysis into their decision-making may find this an encouraging sign to consider initiating or adding to positions.
Implications for Investors
The 'Buy' rating from MarketsMOJO reflects a comprehensive evaluation of Shriram Finance Ltd’s quality, valuation, financial trends, and technical indicators. For investors, this rating implies that the stock currently offers attractive growth potential supported by solid fundamentals and positive market dynamics. However, the 'expensive' valuation grade advises caution, recommending that investors weigh the premium pricing against the company’s growth prospects and market conditions.
Overall, Shriram Finance Ltd presents a compelling investment case within the NBFC sector, combining strong earnings growth, consistent returns, and institutional backing. Investors seeking exposure to a large-cap NBFC with a proven track record and positive outlook may find this stock aligns well with their portfolio objectives.
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Summary
In summary, Shriram Finance Ltd’s current 'Buy' rating is well justified by its strong quality metrics, positive financial trends, and bullish technical outlook, despite a relatively expensive valuation. The company’s consistent growth in net sales and profits, coupled with high institutional confidence and robust returns, make it a noteworthy candidate for investors seeking growth opportunities in the NBFC space. Monitoring ongoing market developments and company performance will be essential to capitalise on this favourable positioning.
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