NBFCs likely to face more downgrades in December quarter, say experts

Until normalcy returns, analysts advise investors against taking fresh exposure to NBFC stocks

The recent commentary from the Reserve Bank of India suggested that non-banking financial companies (NBFCs) aren’t scrounging for capital. In other words, the regulator believes that liquidity isn’t as much a crisis as it was thought to be. Yet, experts say with the system bracing for lower asset growth, the sector could be in for more trouble. 

Consequently, NBFCs stocks are faced with the sharpest earnings cut in many years. Earnings measured as earnings per share or EPS have seen a reduction of 5 per cent to 35 per cent across the board over the last three months. While relatively smaller