Shriram Finance Sees Best Session In Three Months After Strong Q2 Earnings, Stock Split

Share price of Shriram Finance Ltd. surged over 7% on Monday—their best single day gain since July 26—after it posted strong quarterly results that were in line with the street's expectations.

Shriram Finance's total income increased 18% year-on-year to Rs 10,097 crore in the second quarter, according to an exchange filing. The company's net profit also saw a significant rise of 20.2% to Rs 2,153 crore.

The non-banking financial company reported positive earnings with strong asset under management growth, stable net interest margin with lower incremental cost of finances, and strong asset quality, Nuvama said. This has been a key investor focus for BFSI stocks in the second quarter, the brokerage said.

The lender announced a stock split of its equity shares, with a ratio of 1:5, following a board meeting held on Oct. 25, 2024. The decision aims to enhance the liquidity of Shriram Finance's shares and make them more accessible to retail investors, the company said on Friday.

The record date for the stock split will be announced after receiving shareholder approval, with the process expected to be completed within three months.

Further, Shriram Finance also announced an interim dividend of Rs 22 per equity share for financial year 2025. The record date for this interim dividend is set for Nov. 7, 2024, and eligible shareholders can expect the payout by Nov. 24, 2024.

Shriram Finance stock rose as much as 7.29% during the day to Rs 3,317.9 apiece on the NSE. It was trading 4.89% higher at Rs 3,243.8 apiece, compared to a 0.07% decline in the benchmark Nifty 50 as of 09:43 a.m.

The stock has risen 71% during the last 12 months, but has declined 58% year-to-date. The total traded volume so far in the day stood at 8.5 times its 30-day average. The relative strength index was at 36.

Forty of the 41 analysts tracking the company have a 'buy' rating on the stock and one has a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 11%.