Bajaj Finance, Shriram Finance: Why NBFC stocks are emerging as a key bet for JM Financial Asset Mgmt

Non-banking financial companies (NBFCs) are emerging as a key portfolio bet for JM Financial Asset Management as stronger GDP growth, resilient consumption and improving credit demand sharpen the case for high-growth lenders. Senior fund manager Asit Bhandarkar in an exclusive interview to BTTV said his AMC has increased exposure to names such as Shriram Finance Ltd and Bajaj Finance Ltd, arguing that the segment is better placed than many traditional lenders to capture the next leg of expansion.

Why NBFCs are back in focus

Bhandarkar’s core argument rests on three pillars: growth, balance-sheet strength and execution. “NBFCs are the high-growth segment,” he said, adding that the leading players are “very reasonably capitalised” and face “no issue of capital.”

That matters in a market increasingly rewarding earnings visibility and scalable business models. According to Bhandarkar, asset quality across the better-run NBFCs remains “fantastic,” creating a favourable backdrop as economic momentum improves and credit demand broadens.

GDP pickup strengthens the lending thesis

The bullishness on NBFCs is closely tied to the broader macro view emerging from the market. With India posting a strong GDP print and consumption trends holding up despite recent external shocks, JM Financial AMC sees lenders tied to retail demand as natural beneficiaries of the recovery.

In the wider conversation, Bhandarkar had already flagged consumption, financial services and select exporters as key themes. Within that framework, NBFCs stand out because they are more directly levered to household spending and discretionary demand, especially as festival-season consumption gathers pace.

Technology edge over banks

A major differentiator, in Bhandarkar’s view, is technology. He said NBFCs have stayed ahead in implementation and are able to deploy tech “in a far more meaningful manner,” allowing them to expand distribution and customer reach faster than banks.

That operational agility is becoming a bigger competitive advantage in a market where speed, underwriting precision and customer acquisition costs can materially shape profitability. For investors, that makes the segment more than just a cyclical lending play; it becomes a structural financial-services story.

Beyond lending, a broader financials call

The fund house’s stance also reflects a wider preference for financial services rather than plain-vanilla lending alone. “We are not looking at just lending alone,” Bhandarkar said, pointing to a broader basket spanning NBFCs, asset management companies, insurance and other parts of the financial-services chain.

The message is clear: as India’s growth outlook improves and consumption stays firm, JM Financial AMC believes the next winners in financials may come from agile, well-capitalised and tech-savvy NBFCs rather than only from the traditional banking heavyweights.