Despite weak NBFC growth amid sluggish demand, these 4 stocks good bets for investors

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Updated: February 11, 2020 6:27:09 PM

Even as the non-banking finance companies (NBFCs) see stagnant AUM growth, demand recovery is expected to begin soon, a report said.

NBFC sector, AUM, GST implementation, LAP, SME segment, CAGR, IL&FS crisis, NCDThe investors are recommended to remain positive toward high-quality NBFCs with decent backing of the promoters and superior asset-liability management profiles, the brokerage also said.

Even as the non-banking finance companies (NBFCs) see stagnant AUM growth, demand recovery is expected to begin soon, a report said. Some improvement was lately seen in the money supply as NBFCs continued to diversify their borrowing sources toward international and retail markets as against the traditional capital markets, the DBS report also said. Bajaj Finance, HDFC Limited, MMFS, and SHTF are few good bets for the investors in the current scenario, the report added. “We prefer Bajaj Finance  (Buy;TP: Rs 4,900), HDFC Limited (Buy;TP:Rs 2,846) and MMFS (Buy;TP: Rs394). We have upgraded SHTF to Buy with a TP of Rs1,459, factoring in the favorable risk-reward it offers”, DBS also said.

The investors are recommended to remain positive toward high-quality NBFCs with decent backing of the promoters and superior asset-liability management profiles, the brokerage also said. “Excluding Bajaj Finance, the growth number would have been further feeble. Domestic infrastructure and construction activities remained indolent; however, agri-activities have seen some momentum, aided by better water availability. In addition, securitization markets have been buzzing for a while”, it added.

Also read: Sensex, Nifty end higher, RIL, SBI among top gainers; key factors behind today’s rally

Meanwhile, markets snapped their two-session slide to close with smart gains on Tuesday, mirroring optimism in the global markets as investors wagered on limited economic impact of the coronavirus outbreak. Led by gains in index heavyweights RIL, ICICI Bank and HDFC, the 30-share BSE Sensex settled 236.52 points, or 0.58 per cent, higher at 41,216.14. Similarly, the broader NSE Nifty rose 76.40 points, or 0.64 per cent, to 12,107.90. Global markets rose as China re-opened for business after a forced extension to the Lunar New Year holiday because of the coronavirus outbreak, which has killed over 1,000 people and disrupted major global supply chains.

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