New Peak in Share Price
On the trading day, Shriram Finance’s stock price surged to an intraday high of Rs.875.4, representing a 3.2% rise from its previous levels. This price marks the highest level the stock has attained in the past year, surpassing its 52-week low of Rs.493.6 by a substantial margin. The stock’s day change stood at 2.33%, outperforming its sector by 1.69%, signalling relative strength within the NBFC space.
Technical Indicators Support Uptrend
Technical analysis reveals that Shriram Finance is trading above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This alignment of moving averages typically indicates a sustained upward trend, reinforcing the stock’s positive momentum. The broader market context also favours this trend, with the Sensex opening higher and trading close to its own 52-week high, supported by bullish moving averages.
Market Context and Sector Performance
The Sensex opened at 84,856.26 points, gaining 176.40 points or 0.21%, and was trading near 84,848.89 points during the session. It remains approximately 1.54% below its 52-week high of 86,159.02 points. Mid-cap stocks led the market rally, with the BSE Mid Cap index gaining 0.27%, indicating broad-based market strength that has contributed to Shriram Finance’s upward trajectory.
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Strong Financial Performance Underpinning the Rally
Shriram Finance’s one-year performance highlights a total return of 45.86%, significantly outpacing the Sensex’s 5.16% over the same period. This substantial difference reflects the company’s ability to generate value beyond broader market movements. The stock’s valuation metrics show a Price to Book Value of 2.6, indicating a premium relative to peers’ historical averages.
Robust Growth in Sales and Profitability
The company’s net sales have grown at an annual rate of 22.00%, while operating profit has expanded at 22.80%. Quarterly figures reinforce this growth trajectory, with net sales reaching Rs.11,912.44 crores, PBDIT at Rs.8,803.40 crores, and PBT less other income at Rs.3,104.12 crores — all representing the highest levels recorded in recent quarters. These figures demonstrate sustained operational strength supporting the stock’s price appreciation.
Consistent Profitability and Return on Equity
Shriram Finance has maintained positive results for eight consecutive quarters, with a Return on Equity (ROE) of 14.3%. This level of ROE reflects efficient capital utilisation and profitability, contributing to the company’s fair valuation and investor confidence. The PEG ratio of 1.7 further contextualises the relationship between earnings growth and valuation.
Institutional Backing and Market Position
Institutional investors hold 68.27% of Shriram Finance’s shares, indicating strong backing from entities with extensive analytical resources. This high level of institutional ownership often correlates with market stability and confidence in the company’s fundamentals. Over the past three years, the stock has consistently outperformed the BSE500 index, reinforcing its position as a reliable performer within the NBFC sector.
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Summary of Market and Company Performance
Shriram Finance’s recent price action, culminating in a new 52-week high, is supported by a combination of strong financial metrics, favourable technical indicators, and a positive market backdrop. The stock’s outperformance relative to its sector and the broader market highlights its resilience and capacity to deliver consistent returns. The company’s steady growth in net sales and profitability, alongside a healthy ROE and institutional support, underpin this upward momentum.
Conclusion
The attainment of Rs.875.4 as the new 52-week high for Shriram Finance marks a noteworthy achievement in its market journey. This milestone reflects the company’s sustained operational strength and the broader positive sentiment in the NBFC sector. As the stock continues to trade above key moving averages and outperforms sector benchmarks, it remains a significant presence in the Indian financial markets.
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