Up 146% in 3 years: Can this top NBFC stock keep its momentum going?

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Subscribe to enjoy similar stories. Shriram Finance Ltd, which was included in the Nifty 50 a few months ago, continues to maintain its strong upward trajectory, outperforming the broader market by a wide margin this year. The shares of this non-banking financial company (NBFC) have surged by nearly 146% over the last three years, against an increase of about 46% in the NSE benchmark index.

Besides the broader market optimism, Shriram Finance’s newfound scale and diversified portfolio appear to have played a key role in driving its impressive stock performance. As of 9 September, the lender’s stock price was ₹3,315.70 per share, making for a year-to-date gain of roughly 58% and extending its market capitalisation to ₹1.23 trillion. However, as speculations about the Reserve Bank of India’s potential policy changes loom, many investors are wondering whether the Shriram Finance stock can maintain its upward momentum in the years to come.

Let’s quickly look at the main fundamental factors responsible for Shriram Finance’s recent success and which could continue to drive its stock performance in the future. Following the merger of Shriram City Union Finance and Shriram Capital with Shriram Transport Finance in late 2022, Shriram Finance, the merged entity, became the largest retail-focused NBFC in India, with a diversified lending portfolio that includes commercial vehicle loans, two-wheeler financing, small business loans, and personal finance products. The company now also has a strong presence in rural and semi-urban areas.