Shriram Finance share price hits record high on strong Q3; should you buy?

livemint.com:

Shriram Finance jumped over 6 percent to their record high on Monday on the back of strong show in the quarter ended December (Q3FY24). Moreover, positive reviews by various brokerages post the results also aided the sentiment. The company's consolidated net profit rose 4 percent year-on-year (YoY) to ₹1,873.59 crore in the quarter under review versus ₹1,801.66 crore recorded in the same period of the previous year.

Meanwhile, its net interest income (NII) rose 17 percent YoY to ₹5,274.91 crore as against ₹4,511.35 crore logged in the same period last year. The stock rose as much as 6.1 percent to its record high of ₹2,448.85 apiece. The stock has now rallied 106 percent from its 52-week low of ₹1,190, hit on February 28, 2023.

It has surged 87 percent in the last 1 year and almost 17 percent just in January 2024, extending gains for the 3rd straight month. Before this, the stock rose 2.3 percent in December 2023 and 6.7 percent in November 2023. The firm's total assets under management also advanced 20 percent YoY to ₹2.14 lakh crore versus ₹1.77 lakh crore as of December 31, 2022, and ₹2.02 lakh crore as of September 30, 2023.

The asset quality of the NBFC also witnessed an improvement, with gross non-performing assets (NPAs) reducing to 5.66 percent as against 5.79 percent in the preceding September quarter. Meanwhile, its net NPAs in Q3FY24 reduced to 2.72 percent from 3.20 percent last year. Brokerages also remained positive on the stock with up to 21 percent upside potential post the earnings on the back of strong financial performance, fair valuations, and improving asset quality.