Jefferies likes this Nifty50 stock—Rs 710 target implies major upside

Foreign brokerage Jefferies is bullish on the Nifty50 constituent Shriram Finance, after the largecap NBFC has fallen more than 20 per cent from its recent peak. The stock scaled its all-time high on the same day as the heavyweight bluechip Nifty50 index -i.e. September 27, 2024 of 730.43 and since then has cracked over 21 per cent (considering previous day's close). The brokerage has reiterated its 'buy' call on the counter with the target price pegged at Rs 710, implying probable gains of more than 23 per cent from the last close.

Shriram Finance Share Price Movement

On Tuesday, the stock was last seen trading 0.38 per cent or Rs 2.2 higher at Rs 579.4 per share on BSE, tracking mild gains in the broader market.

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Should you buy, sell or hold Shriram Finance shares?

According to Jefferies, the drag in the NBFC stock has occurred about amid concerns around weak commercial vehicle (CV) market as well as rising asset quality risks.

It also pointed out that growth in used passenger vehicle as well as non-auto segment should support 17 per cent AUM CAGR over FY25-27.

Furthermore, asset quality at the company has held up well and any sharp rise in gross non-performing assets (GNPA) seems unlikely.

Also, the company's housing finance subsidiary Shriram Housing Finance Limited's asset quality has stood quite well.

At 1.6x FY26e BV, the brokerage finds the stock's valuation attractive.

Shriram Finance Q3 FY25 Results Summary

For the December quarter of the fiscal year 2025, the company, reported a 73 per cent surge in consolidated net profit to Rs 3,249 crore. The NBFC firm had earned a consolidated net profit of Rs 1,874 crore in the third quarter of the previous fiscal.

Its total income increased to Rs 10,705 crore in the quarter under review from Rs 8,927 crore a year ago.

NII or net interest income (NII) for the third quarter increased by 14.31 per cent to Rs 5,823 crore, in comparison to Rs 5,094 crore in the same period of the previous year

Shriram Finance Stock Historical Performance

In the last one year, the stock has gained over 18 per cent, while in the last three years it has delivered multibagger return to the tune of 156 per cent.

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