Nifty stock to buy: Up 47% in six months, 2nd-largest retail NBFC gets 31% upside target
Antique Stock Broking said the NBFC has continued to operate with superior margins, with net interest margin (NIM) stabilising at 9–9.5 per cent post-merger.
- Mar 30, 2026,
- Updated Mar 30, 2026 1:01 PM IST
Stock to buy: Up 47 per cent in six months, India's second-largest retail NBFC, Shriram Finance Ltd, has received ‘Buy’ rating from Antique Stock Broking, with a target price suggesting a potential 31 per cent upside over Monday's intraday trading price. The domestic brokerage, while initiating coverage on the stock, expects Shriram Finance to deliver a steady improvement in profitability, with return on asset (RoA) expanding from 3.1 per cent in FY25 to 3.5-3.8 per cent over FY26–FY28.
This, Antique said will be driven by asset under management (AUM) growth of 18 per cent compouneded annually over FY26–FY28, led by MSME and gold loan. The brokerage sees uptick, led by AAA rating upgrade; and lower credit costs of less than 2 per cent.
"We initiate coverage on SHFL with BUY rating valuing it at 2.2x FY28E P/B resulting in 12-month target price of Rs 1,150, baking in MUFG infusion in FY27E. Key risks to our thesis include a broad-based economic slowdown, sustained increase in crude oil prices, and intensifying competition in the used vehicle financing segment," it said.
Antique Stock Broking said Shriram Finance has continued to operate with superior margins, with net interest margin (NIM) stabilising at 9–9.5 per cent post-merger against 7–7.5 per cent pre-merger, supported by healthy yields of 16.5 per cent against 15.5 per cent earlier.
"SHFL’s yield profile remains among the strongest in the sector, driven by its higher exposure to the used vehicle segment, which commands a premium of ~200–300 bps over new vehicle financing. The recent capital infusion from MUFG, coupled with an upgrade in credit rating to AAA/ Stable, is expected to lower the CoF by ~100 bps over the medium term which will enable the company to offer new products at relatively better yields and thus also compete against banks," it said.
Antique said Shriram Finance has demonstrated notable improvement in asset quality post-merger despite a relatively higher risk portfolio mix. It noted that the bank's credit costs have moderated meaningfully from a peak of 3.2 per cent in FY22 to 1.8 per cent in 9MFY26.
"In addition, SHFL maintains highest ECL cover on its overall book at 5.9 per cent of total AUM with stage-3 PCR of 49 per cent as of 3QFY26. This further adds comfort on the asset quality of the company. Though we do not expect material deterioration in asset quality of the company as its MSME loans ticket sizes also range Rs 8-10 lakh vs ticket range of Rs less than 5 lakh where major industry stress is residing," it said.
Antique, however, believes geopolitical uncertainties, particularly the ongoing US-Israel-Iran tensions can weigh on the growth in VF and MSME segments over the near term. On Monday, the stock was trading 2.7 per cent lower at Rs 879.40. Antique's target on the stock at Rs 1,150 suggests 31 per cent potential upside on the counter.
Stock to buy: Up 47 per cent in six months, India's second-largest retail NBFC, Shriram Finance Ltd, has received ‘Buy’ rating from Antique Stock Broking, with a target price suggesting a potential 31 per cent upside over Monday's intraday trading price. The domestic brokerage, while initiating coverage on the stock, expects Shriram Finance to deliver a steady improvement in profitability, with return on asset (RoA) expanding from 3.1 per cent in FY25 to 3.5-3.8 per cent over FY26–FY28.
This, Antique said will be driven by asset under management (AUM) growth of 18 per cent compouneded annually over FY26–FY28, led by MSME and gold loan. The brokerage sees uptick, led by AAA rating upgrade; and lower credit costs of less than 2 per cent.
"We initiate coverage on SHFL with BUY rating valuing it at 2.2x FY28E P/B resulting in 12-month target price of Rs 1,150, baking in MUFG infusion in FY27E. Key risks to our thesis include a broad-based economic slowdown, sustained increase in crude oil prices, and intensifying competition in the used vehicle financing segment," it said.
Antique Stock Broking said Shriram Finance has continued to operate with superior margins, with net interest margin (NIM) stabilising at 9–9.5 per cent post-merger against 7–7.5 per cent pre-merger, supported by healthy yields of 16.5 per cent against 15.5 per cent earlier.
"SHFL’s yield profile remains among the strongest in the sector, driven by its higher exposure to the used vehicle segment, which commands a premium of ~200–300 bps over new vehicle financing. The recent capital infusion from MUFG, coupled with an upgrade in credit rating to AAA/ Stable, is expected to lower the CoF by ~100 bps over the medium term which will enable the company to offer new products at relatively better yields and thus also compete against banks," it said.
Antique said Shriram Finance has demonstrated notable improvement in asset quality post-merger despite a relatively higher risk portfolio mix. It noted that the bank's credit costs have moderated meaningfully from a peak of 3.2 per cent in FY22 to 1.8 per cent in 9MFY26.
"In addition, SHFL maintains highest ECL cover on its overall book at 5.9 per cent of total AUM with stage-3 PCR of 49 per cent as of 3QFY26. This further adds comfort on the asset quality of the company. Though we do not expect material deterioration in asset quality of the company as its MSME loans ticket sizes also range Rs 8-10 lakh vs ticket range of Rs less than 5 lakh where major industry stress is residing," it said.
Antique, however, believes geopolitical uncertainties, particularly the ongoing US-Israel-Iran tensions can weigh on the growth in VF and MSME segments over the near term. On Monday, the stock was trading 2.7 per cent lower at Rs 879.40. Antique's target on the stock at Rs 1,150 suggests 31 per cent potential upside on the counter.