Shriram Finance Gains 1.95%: 4 Key Factors Driving the Week’s Momentum

23 February 2026: Surge in Open Interest Signals Growing Market Confidence

On Monday, Shriram Finance witnessed a significant 19.53% increase in open interest in its derivatives segment, rising to 77,957 contracts from 65,222 the previous session. This surge accompanied a futures volume of 59,565 contracts and a combined futures and options value of approximately ₹20,801 crores, highlighting robust liquidity and investor interest. The stock closed at Rs.1,065.25, up 0.57%, outperforming the Sensex’s 0.39% gain and the NBFC sector’s 0.24% rise.

This increase in open interest alongside steady volume suggests fresh capital inflows and heightened conviction in the stock’s near-term prospects. Despite trading just 2.4% below its 52-week high, the stock remained above key moving averages, signalling a bullish technical setup. However, a slight dip below the 5-day moving average and a 40.84% decline in delivery volumes hinted at some short-term consolidation or profit-taking.

25 February 2026: New 52-Week High of Rs.1,089.9 Demonstrates Strong Momentum

Midweek, Shriram Finance surged to a new 52-week high of Rs.1,089.9, closing with a day gain of 2.87%. This marked a 2.61% intraday increase and outperformance of the NBFC sector by 1.93%. The stock traded comfortably above all key moving averages, reinforcing its strong technical position. The broader Sensex rose 0.41% that day but remained 4.18% below its own 52-week peak.

The company’s one-year return stood at an impressive 90.29%, vastly outperforming the Sensex’s 10.87% gain. Financially, Shriram Finance reported robust growth with an average Return on Equity of 14.00%, annual net sales growth of 22.46%, and operating profit growth of 23.66%. Institutional investors held a commanding 68.52% stake, reflecting strong confidence in the company’s fundamentals.

Valuation metrics showed a premium stance, with a Price to Book Value ratio of 3.3 and a PEG ratio of 1.7, indicating market expectations of sustained growth despite the stock’s significant price appreciation.

26 February 2026: Further 52-Week High and Surge in Call Option Activity

On Thursday, Shriram Finance extended its gains, hitting a fresh 52-week high of Rs.1,105.7 and closing up 1.76% at Rs.1,104.75. The stock outperformed the NBFC sector by 0.79% and the Sensex by 0.19%, continuing its strong upward trajectory. It traded above all major moving averages, signalling sustained bullish momentum.

Notably, call option activity surged, with 2,374 contracts traded at the 1,100 strike price, generating a turnover of ₹777.35 lakhs. Open interest at this strike stood at 1,569 contracts, indicating strong investor positioning ahead of the 30 March expiry. The underlying stock price closed just below the strike price at Rs.1,099.20, suggesting expectations of a breakout.

Delivery volumes also rose sharply to 22.08 lakh shares, a 67.61% increase over the five-day average, signalling genuine buying interest. The company’s market capitalisation stood at ₹2,04,259 crore, with a Mojo Score of 72.0 and an upgraded Mojo Grade of Buy, reflecting improved earnings quality and capital adequacy.

27 February 2026: Profit-Taking Leads to Day Decline, Week Ends Positive

Friday saw a reversal in Shriram Finance’s intraday gains as the stock closed at Rs.1,079.85, down 2.25% on the day amid broader market weakness. The Sensex declined 1.16%, and the NBFC sector also faced pressure. Despite the day’s loss, the stock finished the week with a 1.95% gain, significantly outperforming the Sensex’s 0.96% decline.

This late-week profit-taking followed a strong rally earlier in the week, including two consecutive days of new 52-week highs and heightened derivatives activity. The correction may reflect short-term traders booking profits after the recent surge, while longer-term investors continue to monitor the stock’s fundamentals and technical signals.

Key Takeaways from the Week

Positive Signals: Shriram Finance demonstrated strong relative strength by gaining 1.95% over the week while the Sensex declined. The stock’s two new 52-week highs at Rs.1,089.9 and Rs.1,105.7 reflect robust momentum supported by solid fundamentals, including a 14.00% average ROE and consistent quarterly earnings growth. The surge in derivatives open interest and call option activity indicates growing bullish sentiment and institutional confidence, further validated by the upgraded Mojo Grade to Buy with a score of 72.0.

Cautionary Notes: Despite the overall positive trend, the decline in delivery volumes early in the week and the 2.25% drop on Friday suggest some profit-taking and short-term consolidation. The stock’s premium valuation metrics, including a Price to Book Value above 3.3 and a PEG ratio of 1.7, imply that expectations are high, which could increase vulnerability to market volatility or sector-specific risks. Investors should monitor price action around key technical levels and expiry dates closely.

Conclusion

Shriram Finance Ltd’s performance during the week of 23 to 27 February 2026 was characterised by strong momentum, marked by new 52-week highs and heightened derivatives activity. The stock’s 1.95% weekly gain against a declining Sensex underscores its relative strength and the market’s positive view of its fundamentals and growth prospects. Institutional backing and improved technical indicators support this bullish stance, although the premium valuation and late-week profit-taking warrant cautious observation. Overall, the week’s developments provide valuable insights into evolving investor sentiment and the stock’s positioning within the NBFC sector.

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