These are Prabhudas Lilladher's top picks among NBFCs
In a chat with CNBC-TV18, Amnish Aggarwal, Head-Research, Prabhudas Lilladher said Can Fin Homes still seems to be decently poised and has the potential for steady returns given the current inexpensive valuations,
Amnish Aggarwal, Head-Research, Prabhudas Lilladher thinks Can Fin Homes, the housing finance arm of public lender Canara Bank, is a structurally positive bet.
“Can Fin Homes, in terms of price to book, is not expensive. There have been some concerns on NPAs but otherwise, I think the stock still seems to be decently poised and given the inexpensive valuations it is trading at, it will give you very steady returns from hereon also,” he said.
CanFin Homes on October 17 reported an 11.5% year-on-year (YoY) jump in net profit at Rs 158 crore for the second quarter that ended September 30, 2023.
Speaking of Bajaj Finance earnings reported on October 17, Aggarwal said, non-performing assets (NPAs) are a concern but the company continues to deliver and looks good.
Bajaj Finance posted a 27.8% increase in net profit for the September quarter, at ₹3,550.8 crore, compared to ₹2,781 crore in the year-ago period. The net interest income (NII), or the difference between the interest earned and the interest paid, grew 26.3% on a year-on-year basis to ₹8,845 crore.
A CNBC-TV18 Poll estimated a net profit of ₹3,616.6 crore and NII of ₹7,208.7 crore.
In the longer run, structurally, the price to book value can't be more than five times or so, Aggarwal said, adding, "So I think from here on the stock will give you more structural returns in a very gradual and steady manner,” he said.
Also Read | Siddharth Khemka predicts blockbuster quarter for NBFCs, says Bajaj Finance ‘will lead from the front’
The cost of funds of non-banking financial companies (NBFCs) are expected to peak out in Q2FY24, per a CNBC-TV18 analysis, So margin guidance could improve soon.
Projections indicate that strong momentum in disbursals will persist, contributing to substantial loan growth for specific NBFCs.
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(Edited by : Shweta Mungre)
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