Antique Stock Broking has released its latest analysis and share price targets for several Non-Banking Financial Companies (NBFCs), highlighting a strong exit to FY26 but cautioning about prevailing macro risks. The brokerage maintains a positive outlook on the sector, anticipating pent-up demand in the latter half of the current financial year despite near-term headwinds.
Key Ratings and Price Targets for NBFCs
Antique has assigned "Buy" ratings to a range of prominent NBFCs, including Bajaj Finance, Cholamandalam Investment and Finance Company (CIFC), Shriram Housing Finance Limited (SHFL), L&T Finance Ltd, Aadhar Housing Ltd, Aptus Value Housing Finance India Ltd, HomeFirst, and Indiashelter.
Conversely, "Hold" ratings were issued for Mahindra & Mahindra Financial Services (MMFSL) and Aavas Financiers Ltd.
The specific share price targets set by Antique are as follows:
- Bajaj Finance: Rs 1,070
- Cholamandalam Investment and Finance Company (CIFC): Rs 1,920
- Shriram Housing Finance Limited (SHFL): Rs 1,185
- L&T Finance Ltd: Rs 335
- Aadhar Housing Ltd: Rs 620
- Mahindra & Mahindra Financial Services (MMFSL): Rs 325
- Aptus Value Housing Finance India Ltd: Rs 330
- Aavas Financiers Ltd: Rs 1,570
- HomeFirst: Rs 1,450
- India Shelter: Rs 980
Market Outlook and Sectoral Insights
According to Antique, vehicle volumes are showing initial signs of a commercial vehicle (CV) upcycle. However, a temporary delay in recovery might occur due to rising fuel prices, which is expected to be followed by a surge in pent-up demand. Affordable Housing Finance Companies (HFCs) have also expressed concerns regarding inflation, potentially leading to a reassessment of FY27 growth guidance after Q1, though demand momentum remains robust.
The brokerage believes that gold financiers and diversified players are well-positioned to outperform in the current market environment. Gold financing, in particular, offers an effective hedge against any short-term slowdown in credit demand, making gold-focused and diversified financiers favorable picks. CIFC, SHFC, and IndiaShelter are among Antique's preferred selections within its NBFC coverage.
Q4 Performance and Asset Quality
The March quarter saw a significant reduction in the cost of funds, which fueled margin expansion across most companies. Exceptions included Bajaj Finance, L&T Finance, SHFL, and Aadhar, where margins moderated due to Policy Loan Rate (PLR) cuts. Strong disbursement momentum in Q4 laid a positive foundation for FY27 Asset Under Management (AUM) growth.
However, management commentaries indicated slight hesitation due to immediate challenges such as the West Asia conflict and unfavorable monsoon forecasts. On the asset quality front, most companies demonstrated healthy improvements in Gross Stage 3 (GS3) assets and early delinquencies. Notably, four companies—MMFS, CIFC, LTF, and IndiaShelter—created management overlays totaling Rs 550 crore to mitigate the potential impact of these aforementioned headwinds.