Jefferies has maintained its buy rating on Shriram Finance with a target price of ₹1,220 per share, following interactions with the company’s management which indicated continued strength in the commercial vehicle financing segment.
The brokerage said discussions with management suggest that commercial vehicle (CV) demand remains healthy, supporting the company’s loan growth outlook. Shriram Finance has reiterated its assets under management (AUM) growth guidance of 18–20% for FY27–FY28, reflecting continued momentum in vehicle financing and lending activities.
Jefferies expects the company’s AUM growth to improve to around 18% in FY27, driven by stronger new commercial vehicle disbursements as demand picks up across segments.
The brokerage also highlighted that cost of funds could decline by around 80 basis points, which may support spread expansion of roughly 20–25 basis points by FY28. This could contribute to improved profitability as funding conditions ease.
In addition, Jefferies noted that collection trends remain healthy so far, which supports asset quality and operating stability. The brokerage expects net interest margins (NIMs) to expand going forward, with the possibility of positive surprises if funding costs fall faster than anticipated.
Disclaimer: The views and investment tips expressed above are those of the brokerage and do not represent the views of this publication. This article is for informational purposes only and does not constitute investment advice.