š Shrirama Transport Finance (Srtransfin): On its path to becoming India's largest retail finance NBFC. š
Recently, Shriram Group has received RBI approval for the merger of Shriram City Union Finance and Shriram Capital Ltd with Shriram Transport Finance Company, which will establish the country's largest retail finance NBFC.
The merger would allow the group to bring all of its lending products ā commercial vehicles, two-wheeler loans, gold loan, personal loan, auto loan, and small enterprise finance ā under one roof, resulting in the creation of a financial powerhouse that would become a market leader in all of the product and consumer segments in which it operates.
ā About the Company ā
Shriram Transport Finance Company Ltd. is India's largest commercial vehicle finance. The company specialises in financing 5-10-year-old pre-owned trucks.
It has 1799 branches and 24670 employees, including 19179 business team members.
š± Fundamental reasons for the share price growth š±
ā According to SIAM's announcement regarding Ashok Leyland and Tata Motors, truck sales will have more than tripled in May 2022 compared to May 2021. Its biggest beneficiary will be SRTRANSFIN, which primarily finances these vehicles (HCV, MCV, LCV).
ā The improvement of AUM from new car sales and the consolidation of excellent performance in used vehicle sales would result in a re-rating from present levels.
ā The company's asset quality improved in Q4 and will continue to improve in the future quarters.
ā In Q4FY22, the company posted a great set of earnings (PAT increasing 59.6% QoQ/43.9% YoY). Earnings were a beat due to lower provisions and robust NII growth.
š Technical Analysis š
ā Stock is forming a symmetric triangle pattern on daily charts. Breakout on either side will result in a good trend.
ā Despite a declining market trend, the stock price is holding at current levels, demonstrating its strength.
ā The stock has tested a critical demand zone on the weekly charts and has been consolidating in a small range for the previous four months.
ā The stock is trading near the 50 and 100-day exponential moving averages but below the 200-day EMA.
š° Entry : Above 1165 (15 mins closing)
šÆ Target 1: 1220 (Time Frame: 3-4 days)
šÆ Target 2: 1270 (Time Frame: 14-21 days)
š« Stop Loss: Closing below 1120 (Hourly closing)
ā ļø Disclaimer:
The information shared above is only for educational purposes. Please consult your financial advisor before taking any positions.
Do share your views/queries in the comment section.
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