Business Standard

Prabhudas advises investors to be selective on NBFC shares

Expensive valuation, asset quality risks may limit stock performance

Related News

Investors must be selective while buying shares of non-banking finance companies (NBFCs) as valuations no longer appear inexpensive while risks of asset quality deterioration persist due to weak macro-economic environment.

"Frontline NBFCs are not cheap anymore. Most NBFCs have shown strong stock performance and valuations on some names are getting demanding now," Adarsh Parasrampuria and Parul Gulati, analysts with brokerage Prabhudas Lilladher, said in their note to clients on Monday.

The brokerage has downgraded its ratings on and Housing Development Finance Corporation (HDFC) to 'accumulate' from 'buy' as their current share price do not leave room for further upside. It considers Finance's valuation reasonable but advised caution as the commercial vehicle cycle and freight rate movements do not appear encouraging.

While the recent run-up in Mahindra Finance's share is likely to restrict near-term stock performance, it remains the preferred investment option for in the NBFC space. It expects the company to surprise investors with superior margin and higher growth.

In commercial vehicles, while the asset quality has remained stable latest freight rate data and feedbacks indicate that rates have corrected by 4-5% post the festive season. Freight availability has also come off, the brokerage noted.

Car pool collections continue to remain strong and the collection rates for microfinance pools securitised are running at 99.9%.

Read more on:   
|
|
|
|

Read More

Two entities fail to make prima facie case to revoke ban: Sebi

The Securities and Exchange Board of India (Sebi) today said the restraining order on two entities, related to plunge in some mid-cap stocks in July, ...

Quick Links

 

Market News

More demand for cheaper diamond jewellery exports

Buyers pick up low priced ornaments this year compared to high priced ones earlier, producers rely on hopes

MCX-SX to approach CCI against rival BSE

Low transaction fees in BSE's currency derivative segment anti-competitive, alleges MCX-SX

PFRDA sets up an expert committee to assess investment guidelines

The panel will review current investment guidelines for NPS schemes for private sector and recommend changes or new schemes

Norms for REITs to be notified soon: Sebi

Two separate committees have been set-up for the specific guidelines on the issue

Despite Friday falls, markets sustain longest rally since Feb 2012

The 30-share Sensex lost 22 points to close at 27,090 and the 50-share Nifty gained 7 points to end at 8,121.

Back to Top