Fundamental Analysis:
Shriram Finance Ltd. (NSE: SHRIRAMFIN) is a non-banking financial company (NBFC) that provides various financial services. Here are some key fundamental metrics:
1. Earnings and Profitability:
- Net Profit: In the latest quarter, Shriram Finance reported a net profit of ₹1945.9 crore.
- Return on Net Worth: The return on net worth for the full year was 17.27%.
2. Valuation Ratios:
- Price-to-Earnings (P/E) Ratio: The trailing twelve-month (TTM) P/E ratio is approximately 12.7x.
- Price-to-Book (P/B) Ratio: The P/B ratio is around 1.92x.
Technical Analysis:
Let's look at some technical indicators for SHRIRAMFIN:
- The stock is currently trading above its 10-day, 20-day, and 30-day moving averages.
- The 50-day moving average is also below the current price.
- The Relative Strength Index (RSI) is neutral.
The stock is consolidating in the 2250-2550 range where 2550-2600 is the breakout range. It has never closed above the 2600 level but if it does, we may see a positive momentum here. This looks good on dips around the lower range where 200 DEMA support has been held by the stock in the market volatility.
Valuation Comparison with Peers:
Let's compare Shriram Finance's valuation metrics with its peers in the finance industry:
- Price-to-Earnings (P/E) Ratio:
- Shriram Finance's P/E ratio (12.7x) is significantly below the peer average (28.2x).
- Peers include Cholamandalam Investment and Finance, SBI Cards and Payment Services, Muthoot Finance, and Sundaram Finance.
- Price-to-Earnings vs. Industry:
- Shriram Finance's P/E ratio (12.7x) is favorable compared to the Indian Consumer Finance industry average (20x).
- Fair Price-to-Earnings Ratio:
- The estimated fair P/E ratio for Shriram Finance is 22.9x, suggesting it is undervalued relative to its forecasted earnings growth.
Remember that this analysis is based on available data, and you should consider other factors before making investment decisions. Always consult with a financial advisor for personalized advice.
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