Bajaj Finance, Tata Capital, LT Finance, SHFL share price targets as cost of funds rise
Nomura assumed the entire 50-60 bps hike to land in October 2026, lifting cost-of-funds from Q3, with NBFCs passing the increase on to end-customers only from FY28.
- Oct 1, 2026,
- Updated Oct 1, 2026 12:54 PM IST
Nomura in a fresh note projected 1-12 per cent cut in earnings per share (EPS) for FY27 and FY28 for NBFCs, led by worries over rising cost of funds. While the foreign brokerage believes the structural strengths of NBFCs remain intact in a rate-hike scenario, it find the recent regulatory development more concerning. It prefers Bajaj Finance Ltd, Tata Capital Ltd and LT Finance among diversified lenders, and Shriram Finance among vehicle financiers. Nomura said housing financiers could also be comfortably placed in a rising rate environment as it suggested 'Buy' on Aadhar Housing Finance.
The foreign brokerage said bond rates have already moved up 29-70 basis points since the RBI’s hawkish tone and its house view is of two rate hikes during Oct–December 2026. The scenario analysis indicates 1-8 per cent hit on FY27 EPS, it said.
Nomura assumed the entire 50-60 bps hike to land in October 2026, lifting cost-of-funds from Q3, with NBFCs passing the increase on to end-customers only from FY28.
"In this scenario, we see a 1-8 per cent hit to FY27F EPS for our covered NBFCs. And, as the lending rate-hikes start from FY28F, we expect the cuts to our EPS to see a declining trend over FY28-29F. What remains important to note is that, structurally EPS compounding rate (FY27-29F CAGR) remains healthy at c.16-28 per cent," Nomura said.
Given that many diversified NBFCs hold a healthy mix of floating-rate assets, and those with fixed-rate loans typically have shorter tenures, Nomura believes NBFCs’ profitability should remain healthy over FY27-29.
Tha said, regulatory developments over the past few months have been concerning, including insurance distribution reforms affecting credit life insurance policies offered by our covered NBFCs and regulatory hesitation regarding flexi loans offered by NBFCs.
Target prices Nomura has a 12-month target of Rs 615 for Aadhar Housing Finance. It finds Bajaj Finance worthy of Rs 1,270 level. The target for SHFL has been set at 1,235. Tata Capital's target has been maintained at Rs 415. Nomura gave a target of Rs 370 on L&T Finance.
Nomura in a fresh note projected 1-12 per cent cut in earnings per share (EPS) for FY27 and FY28 for NBFCs, led by worries over rising cost of funds. While the foreign brokerage believes the structural strengths of NBFCs remain intact in a rate-hike scenario, it find the recent regulatory development more concerning. It prefers Bajaj Finance Ltd, Tata Capital Ltd and LT Finance among diversified lenders, and Shriram Finance among vehicle financiers. Nomura said housing financiers could also be comfortably placed in a rising rate environment as it suggested 'Buy' on Aadhar Housing Finance.
The foreign brokerage said bond rates have already moved up 29-70 basis points since the RBI’s hawkish tone and its house view is of two rate hikes during Oct–December 2026. The scenario analysis indicates 1-8 per cent hit on FY27 EPS, it said.
Nomura assumed the entire 50-60 bps hike to land in October 2026, lifting cost-of-funds from Q3, with NBFCs passing the increase on to end-customers only from FY28.
"In this scenario, we see a 1-8 per cent hit to FY27F EPS for our covered NBFCs. And, as the lending rate-hikes start from FY28F, we expect the cuts to our EPS to see a declining trend over FY28-29F. What remains important to note is that, structurally EPS compounding rate (FY27-29F CAGR) remains healthy at c.16-28 per cent," Nomura said.
Given that many diversified NBFCs hold a healthy mix of floating-rate assets, and those with fixed-rate loans typically have shorter tenures, Nomura believes NBFCs’ profitability should remain healthy over FY27-29.
Tha said, regulatory developments over the past few months have been concerning, including insurance distribution reforms affecting credit life insurance policies offered by our covered NBFCs and regulatory hesitation regarding flexi loans offered by NBFCs.
Target prices Nomura has a 12-month target of Rs 615 for Aadhar Housing Finance. It finds Bajaj Finance worthy of Rs 1,270 level. The target for SHFL has been set at 1,235. Tata Capital's target has been maintained at Rs 415. Nomura gave a target of Rs 370 on L&T Finance.