Current Rating and Its Significance
MarketsMOJO’s 'Buy' rating for Shriram Finance Ltd indicates a positive outlook on the stock’s potential for capital appreciation and overall financial health. This rating, assigned on 15 Dec 2025, reflects a comprehensive evaluation of the company’s quality, valuation, financial trend, and technical indicators. Investors should understand that this recommendation is based on a holistic assessment of the company’s strengths and risks as they stand today, not merely on historical data.
Quality Assessment: Strong Fundamentals Underpinning Growth
As of 09 February 2026, Shriram Finance Ltd demonstrates robust fundamental quality. The company holds a 'good' quality grade, supported by a consistent track record of profitability and operational efficiency. Its average Return on Equity (ROE) stands at a healthy 14.00%, signalling effective utilisation of shareholder capital to generate earnings. This level of ROE is a strong indicator of the company’s ability to sustain growth and deliver shareholder value over the long term.
Moreover, Shriram Finance has reported positive results for nine consecutive quarters, underscoring its operational resilience and steady earnings momentum. The latest quarterly figures reveal net sales reaching a record ₹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. These milestones highlight the company’s capacity to expand its business while maintaining profitability.
Valuation: Premium Pricing Reflects Market Confidence
Currently, the valuation grade for Shriram Finance Ltd is classified as 'expensive'. This suggests that the stock trades at a premium relative to its peers and historical averages. While a higher valuation can imply elevated expectations from investors, it also reflects confidence in the company’s growth prospects and financial stability. Investors should weigh this premium against the company’s strong fundamentals and growth trajectory to determine if the current price aligns with their investment strategy.
Financial Trend: Positive Momentum in Growth and Profitability
The financial trend for Shriram Finance Ltd is rated as 'positive', indicating favourable developments in key financial metrics. The company has achieved an impressive compound annual growth rate (CAGR) of 22.46% in net sales and 23.66% in operating profit over recent years. This sustained growth trajectory is a testament to effective management strategies and expanding market presence within the Non-Banking Financial Company (NBFC) sector.
Institutional investors hold a significant 68.52% stake in the company, reflecting strong institutional confidence. These investors typically possess superior analytical resources and a long-term perspective, which can contribute to stock price stability and support during market volatility.
Technicals: Bullish Indicators Support Upward Momentum
From a technical standpoint, Shriram Finance Ltd is currently rated as 'bullish'. The stock has demonstrated strong price momentum, with recent returns reinforcing this trend. As of 09 February 2026, the stock has delivered a one-day gain of 1.42%, a one-week increase of 5.65%, and a one-month rise of 4.26%. More notably, the three-month and six-month returns stand at 24.53% and 66.79% respectively, while the year-to-date (YTD) gain is 2.05%. Over the past year, the stock has surged by an impressive 81.76%, reflecting sustained investor interest and positive market sentiment.
These technical indicators suggest that the stock is in an upward trend, supported by strong buying interest and favourable market conditions. For investors, this bullish technical profile complements the fundamental strengths, making Shriram Finance Ltd an attractive proposition in the NBFC sector.
Here's How the Stock Looks Today
As of 09 February 2026, Shriram Finance Ltd is positioned as a large-cap NBFC with a Mojo Score of 72.0, which corresponds to a 'Buy' grade. This score reflects a balanced assessment of the company’s quality, valuation, financial health, and technical outlook. The current market cap and sector positioning further reinforce its status as a key player within the financial services industry.
The company’s consistent growth in net sales and operating profit, coupled with strong quarterly earnings, indicates a resilient business model capable of navigating economic cycles. The high institutional ownership provides an additional layer of confidence, as these investors tend to conduct thorough due diligence before committing capital.
While the valuation is on the higher side, the premium appears justified by the company’s growth prospects and solid fundamentals. Investors should consider this factor alongside their risk tolerance and investment horizon.
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Investor Takeaway
For investors evaluating Shriram Finance Ltd, the 'Buy' rating from MarketsMOJO signals a favourable risk-reward profile based on current data. The company’s strong quality metrics, positive financial trends, and bullish technical outlook provide a compelling case for inclusion in a diversified portfolio. However, the premium valuation warrants careful consideration, especially for value-focused investors.
Understanding the interplay of these factors is crucial. The quality and financial trend grades highlight the company’s operational strength and growth potential, while the technical grade confirms market momentum. Together, these elements form the foundation of the current recommendation.
Investors should continue to monitor quarterly results, sector developments, and macroeconomic conditions that could impact the NBFC space. Maintaining a balanced perspective on valuation and growth prospects will help in making informed decisions aligned with individual investment goals.
Sector Context and Market Position
Shriram Finance Ltd operates within the NBFC sector, which plays a vital role in India’s financial ecosystem by providing credit and financial services beyond traditional banking channels. The company’s large-cap status and strong institutional backing position it favourably amid sector competition.
The NBFC sector has witnessed robust growth driven by increasing demand for credit in retail and commercial segments. Shriram Finance’s ability to sustain high growth rates in net sales and operating profit reflects its competitive advantage and effective market penetration strategies.
Investors should note that while the sector offers growth opportunities, it is also subject to regulatory scrutiny and economic cycles. Shriram Finance’s consistent performance and positive outlook suggest it is well-equipped to manage these challenges.
Conclusion
In summary, Shriram Finance Ltd’s 'Buy' rating by MarketsMOJO, last updated on 15 Dec 2025, is supported by strong fundamentals, positive financial trends, and bullish technical indicators as of 09 February 2026. The company’s premium valuation reflects market confidence in its growth prospects and operational strength. For investors seeking exposure to a leading NBFC with a proven track record, Shriram Finance presents a compelling opportunity, provided they consider valuation levels within their investment framework.
Careful monitoring of ongoing performance and sector dynamics will be essential to capitalise on the stock’s potential while managing associated risks.
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