Shriram Finance slumps 5% after Q4 results: Why brokerages see 19% upside potential

Shriram Finance dips 5% post-Q4 but brokerages predict up to 19% upside—see detailed analyst insights and consider your investment move!

Written by Sparsh Bansal

April 27, 2026 13:36 IST

A stock market analysis chart showing Shriram Finance’s 41% YoY profit surge vs. its 4.7% share price drop, highlighted with a "Buy the Dip" recommendation from Nomura.

Investors weigh Shriram Finance’s minor asset quality headwinds. (Image: Canva)

Shriram Finance share price plunged nearly 5% to a low of Rs 963.75 on the National Stock Exchange, despite reporting a 41% year-over-year (YoY) surge in net profit to Rs 3,013.6 crore. What’s the big worry for the share price now, and why have most brokerages rated the stock a ‘Buy’? Experts believe that the near-term weakness could be a result of the minor headwinds in asset quality.

Motilal Oswal on Shriram Finance

Motilal Oswal has maintained its Buy rating on Shriram Finance, with a target price of Rs 1,200, implying an upside of more than 19%. The company reported a resilient quarter, but there was a minor deterioration in asset quality. Its FY26 AUM rose 15% YoY. The firm’s trends in the first half of FY27 need to be closely monitored.

Shriram Finance’s opex declined 2% YoY to Rs 1,870 crore, which was 13% lower than the estimate, largely due to sequentially lower employee expenses (Q3 had one-time impact from labour code). Transaction costs in the nature of DSA commissions in the 2W loans are now not treated as upfront expenditure. They have been amortised at EIR over the loan tenure for loans granted from January 2026 onward.

Consequently, fees and commission expenses were lower by Rs 51.5 crore for the quarter. Shriram Finance guided for a CI ratio of 26-27%, with operating costs expected to grow at 10-12% over the medium term.

JM Financial on Shriram Finance

JM Financial has raised the target price to Rs 1,175 from Rs 1,100, looking at an upside of Rs 16% from the current market price. The brokerage has maintained its ‘Buy’ call on the stock.

Shriram Finance’s well-structured and diversified lending operations, supported by a strong secured portfolio, have sustained steady growth and profitability. Additionally, the recent strategic equity investment from MUFG has significantly bolstered its balance sheet, offering room for future growth phases.

Even so, weakening asset quality trends, particularly in Passenger Vehicle, MSME, and Commercial Vehicle, remain key variables to monitor amid prevailing geopolitical uncertainty.

Nomura on Shriram Finance

Nomura has a target price of Rs 1,200 on Shriram Finance, looking at an upside of 19% from the current market price, and maintains its ‘Buy’ rating on the stock. The company’s management aims for 18% loan growth over the medium term but has suggested a 15-18% range for FY27. Lower-than-expected opex (reclassification of fee expense of the two-wheeler segment) and credit costs were the key drivers behind the beat.

AUM growth for FY26 of 15% was primarily driven by commercial vehicle (CV) and passenger vehicle (PV), with both segments recording 19% YoY growth. Given the headwind of US tariffs, the growth rate remained slow in the MSME segment.

The brokerage said that vehicle financiers may face multiple headwinds in FY27. However, spread or margin expansion should make Shriram Finance relatively better off. “We trim loan growth by 16.4% for FY27 and by 18% over FY28-29. Lower opex guidance for FY27 leads us to lift our net profit estimate by 5%,” said Nomura.

Shriram Finance share price performance

The share price of Shriram Finance has fallen 8% in the last five days. The stock has given a return of 8% in the past one month and 35% in the last six months. Shriram Finance’s stock price has raised investors’ wealth by more than 56% over the previous 12 months.

This article was first uploaded on April twenty-seven, twenty twenty-six, at thirty-six minutes past one in the afternoon.