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Shriram Transport Finance (BSE:511218)

INE721A01013

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Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Shriram Transport Finance stock research in summary

shriramfinance.in

ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), Shriram Transport Finance (Consumer Finance, India) shares have much better financial characteristics than comparable stocks. Shares of Shriram Transport Finance are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives). But they show above-average growth (Growth Rank of 93) and are safely financed (Safety Rank of 51, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on Shriram Transport Finance's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Shriram Transport Finance exhibits low value (Obermatt Value Rank of 40), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 93). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 51) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	40
Growth Rank	93
Safety Rank	51
Combined Rank	77

Country	India
Industry	Consumer Finance
Index	Good Governace Growth Markets, Independent Boards Growth Markets
Size class	Large

2-May-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Shriram Transport Finance

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	37	51	38	40
GROWTH
GROWTH	33	73	61	93
SAFETY
SAFETY	33	76	51	51
SENTIMENT
SENTIMENT	n/a	49	79	^new
360° VIEW
360° VIEW	n/a	85	60	^new

Most recent update of the stock research: 2-May-2024. Financial reporting date used for calculating ranks: 31-Mar-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Shriram Transport Finance is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	37	51	38	40
GROWTH
GROWTH	33	73	61	93
SAFETY
SAFETY	33	76	51	51
COMBINED
COMBINED	11	86	48	77

Last update of combined financial performance: 2-May-2024. Stock analysis on combined financial performance: The higher the rank of Shriram Transport Finance the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), Shriram Transport Finance shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Shriram Transport Finance. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 51, which means that the stock price compared with what market professionals expect for future profits is lower than for 51% of comparable companies, indicating a good value concerning Shriram Transport Finance's profit levels. But Price-to-Sales is 48 which means that the stock price compared with what market professionals expect for future profits is higher than for 52% of comparable companies, indicating a low value concerning Shriram Transport Finance's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 41 and for dividend yield, which is lower than for 68% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 40, is a hold recommendation based on Shriram Transport Finance's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Shriram Transport Finance is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	44	44	46	48
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	41	68	50	51
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	54	53	41	41
DIVIDEND YIELD
DIVIDEND YIELD	38	34	26	32
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	37	51	38	40

Last update of Value Rank: 2-May-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Shriram Transport Finance; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2024, Shriram Transport Finance shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Shriram Transport Finance. Sales Growth has a value of 82, which means that, currently, professionals expect the company to grow more than 82% of its competitors. The same is valid for Profit Growth with a value of 67 and for Capital Growth with 81. In addition, Stock Returns had an above-average rank value of 91, which means they have been higher than 91% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Shriram Transport Finance exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	15	74	83	82
PROFIT GROWTH
PROFIT GROWTH	n/a	27	57	67
CAPITAL GROWTH
CAPITAL GROWTH	n/a	100	1	81
STOCK RETURNS
STOCK RETURNS	90	39	85	91
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	33	73	61	93

Last update of Growth Rank: 2-May-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Shriram Transport Finance.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company Shriram Transport Finance has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Shriram Transport Finance is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Shriram Transport Finance. Liquidity is at 79, meaning the company generates more profit to service its debt than 79% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 45, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 55% of its competitors. Leverage is also high at a rank of 24, which means that the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 51 (better than 51% compared with alternatives), Shriram Transport Finance has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	16	18	30	24
REFINANCING
REFINANCING	64	81	41	45
LIQUIDITY
LIQUIDITY	30	79	82	79
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	33	76	51	51

Last update of Safety Rank: 2-May-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Shriram Transport Finance and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	55	85	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	53	45	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	80	90	^new
MARKET PULSE
MARKET PULSE	n/a	6	42	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	49	79	^new

Last update of Sentiment Rank: 2-May-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Shriram Transport Finance.
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