Bajaj Finance, L&T Finance poised to benefit as NBFC earnings recovery broadens: Siddhartha Khemka
India’s NBFC sector is showing signs of a broad-based cyclical recovery, with FY27 first-quarter results pointing to stronger loan growth, improving asset quality, lower credit costs and emerging operating leverage. Earnings estimates are also being upgraded, raising expectations of sustained profitability and a potential valuation re-rating across leading lenders.
The Economic Times reports that India's non-banking financial companies (NBFCs) are experiencing a broad-based cyclical recovery, with first-quarter FY27 results indicating improvement across growth, asset quality, margins, and operating leverage. This recovery is being driven by healthy loan growth across secured and unsecured segments, normalised credit costs, and improving collection efficiencies.
Notably, asset quality has shown significant strength, with tighter underwriting and stronger collection infrastructure contributing to the improvement. Growth is also recovering across various segments, including vehicle financing, housing finance, and MSME lending, supported by favorable demand conditions. While risks remain, including geopolitical tensions, inflation, and interest-rate movements, the sector is entering a phase with stronger earnings growth and a focus on profitable, return-accretive growth.
Bajaj Finance is poised to benefit from this broader earnings recovery, with the company moving beyond the normalisation phase and entering a period of structurally stronger earnings growth.
Brief written by urgent.news from The Economic Times - Top News's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
