Shriram Finance: Bullish on CV Demand, Eyes EV Growth

Shriram Finance (SFL) maintains a strong optimistic outlook on commercial vehicle (CV) demand, successfully navigating recent price increases stemming from commodity inflation. As India’s largest CV financier, the company anticipates robust economic activity will continue to fuel this sector, despite broader global challenges like US tariffs and West Asian issues.

Executive Vice-Chairman Umesh Revankar highlighted the strategic advantage of rising vehicle prices for current owners. This trend not only boosts the value of their assets and freight rates but also directly contributes to the expansion of SFL’s loan book.

Electric Vehicle Financing Surges

SFL has observed a remarkable five-fold increase in electric vehicle (EV) financing disbursements. Monthly figures escalated from Rs 50 crore last year to Rs 250 crore this year, with an ambitious target set for Rs 500 crore next year.

The company’s strategic expansion plans include opening approximately 150 new branches during the current financial year. This initiative will be supported by recruiting an additional 2,000 to 3,000 employees to bolster its market presence.

Strategic Capital Infusion

A significant development involves Japan’s MUFG acquiring a 20% stake in SFL, a deal valued at nearly Rs 40,000 crore. This substantial investment provides SFL with critical capital stability, projected to last until 2030.

Furthermore, the MUFG partnership is expected to facilitate valuable connections with Japanese companies seeking financial assistance within India. SFL projects an 18-20% growth in its assets for FY27, ultimately aiming to double its total assets within the next five years, driven by the expanding EV demand across various vehicle segments.