Around 2% of India’s total population invests in financial assets. The mutual fund industry’s penetration in India is close to 7% (Based on the number of PAN cardholders). This under penetration offers a huge opportunity for the industry to grow.
Migration to financial savings, wider distribution and sustainable performance are expected to enable growth in the industry.
Also, increasing financial literacy among investors, digitization and the number of mediums available tend to attract more investors to invest in the financial markets.
Shriram Finance stock price today is Rs 3,201.85. To understand the functions of the Shriram Finance better, you must go through the following points:
Key Financials –
- Profitability: Profit margin (PAT margin) of the company shows how well a company controls its cost. It is one of the important indicators to show the financial health of the company. Net profit of Shriram Finance is Rs 7,190.48Cr and the compounded growth of profit in the past 3 years is 45 %. The PAT margin of Shriram Finance is 20.57 %.
- EPS growth: Investors should ensure the EPS figure is growing faster than revenue numbers because it indicates company management is increasing the efficiency with which it runs the company. In Shriram Finance , the EPS grewby 82 % YOY.
Financial Ratios –
- Return on Equity (ROE): Shriram Finance has a average ROE track record. The ROE of Shriram Finance is at 70 % for the latest year.
- P/E Ratio: Relative valuation metrics like the P/E ratio can be used to see if the stock of Shriram Finance is worth at the current levels at Rs 3,201.85. The stock is trading at a current P/E ratio of 33and the average historical P/E for the last 5 years was 10.41.
- P/B Ratio can be one of the best metrics to value such companies. Currently, Shriram Finance is trading at a P/B of 38. The average historical P/B of Shriram Finance for the last 5 years was 1.32.
Shriram Group and South African financial services giant Sanlam jointly own Shriram Life Insurance and Shriram General Insurance. Financial services conglomerate Shriram Group is planning to list its general insurance arm first followed by the life insurance company. The Sanlam group recently acquired a stake held by private equity major TPG in the general and life insurance entities. TPG held 6.29 percent in Shriram General Insurance and 7.04 percent in Shriram Life.
Executive Vice Chairman, Mr. Revankar highlighted that currently Shriram Finance, the group’s diversified non-bank finance company (NBFC), does not have plans to tap into the overseas bond market for funds as they are comfortable in raising money from domestic capital markets.
Technically, the stock is in an uptrend after 19th Aug once it came out of the consolidation zone. Capitalizing on the momentum today we recommended the ATM Call Option after opening above yesterday’s consolidation.
