Shriram Transport Finance Share Price
Shriram Trans Finance is an Indian Non-Banking Financial Company, which was incorporated in 1991 for the purpose of savings and current accounts, loans, and advances to the individual primary members including Engineers and Entrepreneurs registered with the Government of Maharashtra.
What is Shriram Transport Finance
Shriram Transport Finance is one of the leading asset financing companies in India. The company was incorporated in 1979 and is headquartered in Chennai. It provides financing for commercial vehicles, trucks, buses, three-wheelers, cars, and construction equipment. As on 31 March 2020, the Company had a network of 543 branches across 26 states and 4 union territories in India.
The company offers a wide range of products including term loans, vehicle loans, loans against property, and fleet card products. It also offers to lease and hires purchase services. Shriram Transport Finance has a well-diversified customer base with over 1.3 million customers. The company has strong relationships with major Original Equipment Manufacturers (OEMs) such as Tata Motors, Mahindra & Mahindra, Ashok Leyland, Eicher Motors, Volvo Eicher Commercial Vehicles, Daimler India Commercial Vehicles, MAN Trucks India
The company has been consistently profitable since its inception and has been able to maintain a healthy balance sheet with low leverage ratios. The company's Gross Non-Performing Assets (NPA) ratio stood at 0.9% as on 31 March 2020 while its Net NPA ratio was 0%.
Analysis of Shriram Transport Finance's share price increase
the share price has more than doubled in the last year. The stock is currently trading at Rs 1,425, up 102% from its 52-week low of Rs 706 hit on February 28, 2020. The substantial increase in the share price was on the back of strong operational performance in FY20.
The Chennai-based NBFC reported a 61% year-on-year (YOY) growth in net profit to Rs 1,260 crore for the financial year ended March 31, 2020 (FY20). The total income during the year rose by 27% YOY to Rs 9,610 crore.
For the quarter that ended June 30, 2020 (Q1FY21), Shriram Transport Finance reported a 36% YOY decline in net profit to Rs 351 crore. Total income during the quarter fell by 12% YOY to Rs 2,611 crore.
The company’s asset quality remained under pressure with the gross non-performing assets (NPA) ratio increasing to 6.17% in Q1FY21 from 5.65% in Q4FY20 and 3.45% in Q1FY20. Net NPA ratio also increased to 3.02% in Q1FY21 from 2.68% in Q4FY20 and 1.70% in Q1FY20.
Despite the pandemic-induced stress on its asset quality, Shriram Transport Finance’s well-diversified loan portfolio
Impact analysis of Shriram Transport Finance
Shriram Trans Fin is India's leading diversified financial services company with a strong focus on rural and semi-urban areas. The company offers a wide range of financial products and services including loans, deposits, insurance, and investment products.
The company has a significant presence in the Indian financial services sector with a market share of 5%. Shriram Trans Fin is one of India's largest non-banking finance companies (NBFCs) with a total asset size of Rs 304 billion as of March 31, 2019.
The company has a strong network of over 4,000 branches and 10,000 employees serving more than 10 million customers across the country.
Shriram Trans Fin is listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) with a market capitalization of Rs 36 billion as of June 2019.
Shriram transport's share price is
Shriram Transport Finance Company Limited is an India-based company, which is engaged in the business of financing commercial vehicles. The Company's geographical segments include North, South, and East. The Company offers a range of products, including Loans for New Vehicles, Pre-Owned Vehicle Loans, Refinance of Existing Commercial Vehicles, Non-Convertible Debentures, and Fixed Deposits.
It also provides ancillary products and services, such as Insurance and Leasing. The Company's loan portfolio includes loans to small truck operators, three-wheeler taxi drivers, and two-wheeler riders. As of March 31, 2016, the Company had a network of over 780 branches across 24 States in India.
Shriram transport Perfomance
Shriram Transport Finance is one of India's leading non-banking financial companies, providing finance to commercial vehicle owners. The company offers a wide range of products like loans against property, home equity loans, and car loans. Shriram Transport Finance has a strong network of branches and ATMs across India and has been growing at a rapid pace. The company's share price has been on an upward trend in the last few years.
The company's performance can be attributed to its strong focus on customer service, innovative products, and efficient delivery of services. Shriram Transport Finance has a dedicated team of customer service executives who are always ready to help their customers. The company has also launched several innovative products like the 'Shriram Super fuel saver card' which helps customers save money on fuel expenses. Shriram Transport Finance is also expanding its reach by setting up new branches and ATMs across India.
With such impressive performance, it is no wonder that Shriram Transport Finance's share price is on an upward trend. Investing in the company's shares would be a wise decision for long-term growth potential.
Shriram transport share price target
In the past year, Shriram Transport Finance Ltd’s (STFC) stock price has underperformed the Nifty NBFC index by 25%. The current market conditions are challenging for the entire NBFC sector.
With interest rates hardening, loan growth for NBFCs is expected to moderate in FY19. On the other hand, banks are benefiting from a downward shift in interest rates as they have started to pass on the benefit of lower policy rates to their customers. This results in faster growth of loans for banks as compared to NBFCs.
STFC’s asset quality has been deteriorating in recent quarters. The company’s gross non-performing assets (NPA) ratio stood at 3% at the end of FY18, as compared to 1.4% in FY17. In Q4FY18, net NPAs increased to 2%, from 1.3% in Q3FY18.
The provisioning coverage ratio (PCR) has decreased sharply from 74% in FY17 to 67% in FY18. The PCR further declined to 62% in Q4FY18 owing to higher slippages during the quarter. Given the challenging operating environment, we believe that STFC’s asset quality will come under pressure in FY19 as well.
We maintain our Sell rating on the stock with a target price of Rs 920 per share, valuing it
Shriram Transport Market Trend
The Shriram Transport Finance Company is the largest player in the Indian commercial vehicle finance market. The company has a strong presence in the key markets of India, with a market share of over 50%. The company's growth has been driven by its focus on providing easy and flexible financing solutions to commercial vehicle owners and operators.
The Shriram Transport Finance Company's share price has been on a steady uptrend in recent years, driven by strong growth in the company's business. The company is well-positioned to benefit from the continued growth in the Indian commercial vehicle market.
Shriram transport Finance Assest
Shriram Transport Finance is one of the largest asset financing companies in India. The company offers a wide range of financing products to meet the needs of its customers. These products include vehicle loans, commercial vehicle loans, two-wheeler loans, three-wheeler loans, and four-wheeler loans.
The company has a strong network of over 4,000 branches across India and has a customer base of over 15 million. The company's asset portfolio grew by 18% in FY19 to Rs 1.5 trillion. The non-performing assets ratio stood at 0.9% on March 31, 2019.
The company's shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Conclusion
Shriram Transport Finance Ltd is one of the leading players in the commercial vehicle finance industry in India. The company offers a wide range of financial products and services to its customers, providing them with the necessary funds to purchase commercial vehicles. The Shriram Trans Fin share price has been on a steady uptrend over the past few years, and investors have been reaping good returns from their investments in the company.
Pros
If you're looking for a reliable and well-established company to invest in, Shriram Transport Finance is a great option. It's one of India's leading NBFCs with a strong track record of profitability and growth.
Here are some of the main reasons to consider investing in Shriram Transport Finance:
1. Diversified business model: The company has a diversified business model with a presence across multiple segments of the transportation industry. This reduces its dependence on any one particular segment and helps to mitigate risk.
2. Strong brand equity: Shriram Transport Finance enjoys strong brand equity, which gives it an advantage over its competitors. This is especially important in the highly competitive NBFC space.
3. Robust financials: The company has strong financials with consistent profits and asset quality. This makes it one of the more stable companies in the NFC space and reduces the risk of defaults.
Cons
High-interest rates: The Shriram Transport Finance Company charges interest at a rate of around 15% per annum. This is higher than the average interest rate charged by other NBFCs.
Lack of transparency: There have been instances where the company has not been transparent about its financials and has misled investors.
Dependence on small truckers: The company's business model is based on lending to small truckers who often have limited resources and cannot repay their loans. This makes the company's loan portfolio vulnerable to defaults.
High exposure to commercial vehicles: Commercial vehicles are subject to higher wear and tear and are more likely to default on loans. Shriram Transport Finance has a high exposure to loans against commercial vehicles, which makes it risky.
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