UBS has reiterated its “Buy” recommendation for Shriram Finance, setting a target price of 3,850 against the current market price (CMP) of 3,235.7. The financial services firm cites several factors supporting its positive outlook:
- Merger Synergies: UBS expects continued benefits from Shriram Finance’s recent merger, which should contribute to ongoing growth.
- NIM Compression: While net interest margin (NIM) compression is anticipated, UBS views this as a temporary challenge. The key focus will be on Shriram Finance’s ability to expand into new market segments.
- Stable Asset Quality: UBS projects that Shriram Finance will maintain stable asset quality. The company’s guidance on credit costs remains unchanged, indicating confidence in its risk management practices.
- Improving Efficiency: Management expects the cost-to-income (C/I) ratio to improve and stabilize within the 26-27% range, suggesting enhanced operational efficiency.
These factors collectively paint a promising picture for Shriram Finance’s future performance, supporting UBS’s bullish stance on the stock. Investors are advised to consider these insights when evaluating Shriram Finance as a potential investment opportunity.
Disclaimer: This article is based on UBS’s analysis of Shriram Finance. The information provided is for informational purposes only and should not be considered as financial advice. Stock markets are subject to risks, and investment decisions should be made after thorough research and consultation with a qualified financial advisor. Past performance does not guarantee future results. The target price and recommendations may change based on market conditions and company performance.
