Shriram Finance Ltd is Rated Buy by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s Buy rating for Shriram Finance Ltd indicates a positive outlook on the stock’s potential for investors seeking growth within the Non Banking Financial Company (NBFC) sector. This rating reflects a combination of strong fundamentals, favourable financial trends, and technical indicators that collectively suggest the stock is well-positioned for continued appreciation. The rating was revised from Hold to Buy on 15 Dec 2025, accompanied by an increase in the Mojo Score from 68 to 72, signalling improved confidence in the company’s prospects.

Here’s How Shriram Finance Looks Today

As of 29 January 2026, Shriram Finance Ltd demonstrates robust financial health and market performance. The company’s market capitalisation remains in the largecap category, underscoring its established presence in the NBFC sector. The stock has delivered impressive returns over various time frames, with a one-year return of 84.48%, a six-month gain of 59.98%, and a three-month increase of 38.05%. Even the shorter-term performance is positive, with a one-month return of 6.87% and a year-to-date gain of 2.49%. These figures highlight strong investor confidence and sustained momentum in the stock price.

Quality Assessment

The quality grade assigned to Shriram Finance Ltd is classified as good. This reflects the company’s consistent operational performance and sound management practices. The firm has reported positive results for nine consecutive quarters, a testament to its stable earnings generation and effective business strategy. Notably, the latest quarterly figures show net sales reaching a record high of ₹12,170.76 crores, profit before tax (excluding other income) at ₹3,337.78 crores, and a net profit after tax of ₹2,529.67 crores. Such sustained profitability underscores the company’s ability to navigate market challenges while maintaining growth.

Valuation Considerations

While the valuation grade is marked as expensive, this is reflective of the premium investors are willing to pay for a company with strong fundamentals and growth prospects. The elevated valuation suggests that the market anticipates continued earnings growth and values the company’s leadership position within the NBFC sector. Investors should weigh this premium against the company’s growth trajectory and risk profile when considering entry points.

Financial Trend Analysis

The financial grade for Shriram Finance Ltd is positive, supported by healthy long-term growth metrics. The company’s net sales have grown at an annualised rate of 22.46%, while operating profit has expanded at 23.66% per annum. This consistent upward trend in revenue and profitability indicates effective scaling of operations and efficient cost management. Additionally, the company maintains a strong return on equity (ROE) averaging 14.00%, which is a key indicator of management’s ability to generate returns on shareholders’ capital.

Technical Outlook

From a technical perspective, the stock is rated as bullish. This suggests that the stock’s price momentum and chart patterns are favourable, supporting the positive fundamental outlook. The recent price movements, including a daily gain of 0.19% and weekly increase of 1.46%, reinforce the bullish sentiment among traders and investors alike. Such technical strength often complements fundamental analysis by signalling potential entry points and confirming trend sustainability.

Institutional Confidence

Another important factor underpinning the Buy rating is the high level of institutional ownership, currently at 68.52%. Institutional investors typically conduct rigorous due diligence before committing capital, and their significant stake in Shriram Finance Ltd reflects confidence in the company’s long-term prospects. This institutional backing can provide stability to the stock price and reduce volatility, benefiting retail investors.

Implications for Investors

For investors, the Buy rating from MarketsMOJO suggests that Shriram Finance Ltd is a compelling opportunity within the NBFC sector, combining strong fundamentals with positive financial trends and technical momentum. While the stock’s valuation is on the higher side, the company’s consistent growth, profitability, and institutional support justify this premium. Investors should consider their risk tolerance and investment horizon, but the current data as of 29 January 2026 supports a constructive view on the stock’s potential.

Summary of Key Metrics

To summarise, as of 29 January 2026, Shriram Finance Ltd exhibits:

• Strong long-term fundamental strength with an average ROE of 14.00%


• Robust growth in net sales at 22.46% annually and operating profit growth of 23.66%


• Record quarterly results with net sales of ₹12,170.76 crores and PAT of ₹2,529.67 crores


• High institutional holdings at 68.52%, indicating strong market confidence


• Positive technical indicators supporting a bullish outlook

These factors collectively underpin the Buy rating and suggest that Shriram Finance Ltd remains a stock worth considering for investors seeking exposure to a well-managed NBFC with solid growth prospects.

Looking Ahead

Investors should continue to monitor quarterly earnings, sector developments, and macroeconomic factors that could impact the NBFC space. Given the company’s track record and current positioning, Shriram Finance Ltd is well-placed to capitalise on opportunities in the financial services sector. The Buy rating reflects a balanced view that acknowledges the company’s strengths while recognising the premium valuation investors are paying for quality and growth.

Conclusion

In conclusion, the MarketsMOJO Buy rating for Shriram Finance Ltd, last updated on 15 Dec 2025, is supported by strong fundamentals, positive financial trends, and bullish technical signals as of 29 January 2026. This rating serves as a guide for investors looking to add a high-quality NBFC stock with demonstrated growth and profitability to their portfolios.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →