NBFC stocks remain buy-on-dips bets as FY27 credit growth stays strong: Sunny Agarwal

Non-banking financial companies (NBFCs) may have already delivered a sharp run-up in both earnings and stock prices, but the rally may not be over yet. SBI Securities believes the sector remains well placed for the rest of FY27, with strong loan growth guidance, improving profitability and selective stock-specific triggers keeping the investment case intact.

Growth momentum stays intact

Sunny Agarwal, DVP and Head of Fundamental Desk at SBI Securities, said NBFCs are still on track to post a “healthy growth” in the remaining part of FY27. The core argument is straightforward: most companies are guiding for credit book or advances growth of 15-25 per cent, depending on their scale and business mix.

That matters because the broader earnings season has already shown that financials are among the stronger pockets of the market. In the wider discussion, Agarwal argued that banking and NBFCs were among the sectors that delivered a solid set of quarterly numbers, even as investors remained cautious on margin trends in parts of the lending ecosystem.

Why dips may be buying opportunities

Agarwal’s market call on the segment was unambiguous: “NBFC should continue to deliver a healthy set of number. And I think any dip is a buying opportunity.” That suggests the recent rally in select names has not fully exhausted the sector’s earnings visibility, especially if loan growth sustains and funding conditions remain supportive.

For investors, the key variable will be whether balance-sheet expansion translates into stable or improving spreads. In a sector where borrowing costs can materially shape profitability, even modest funding relief can have an outsized impact on net interest margins.

Top stock picks in focus

Among the preferred names, Shriram Finance Ltd stands out for a specific funding trigger. Agarwal said the “infusion of large funds from a Japanese conglomerate” could lower its cost of borrowing, a move that may help expand net interest margins and strengthen earnings delivery. His stance on the stock remains a clear “buy on dip strategy.”

Bajaj Finance Ltd is another top pick after what he described as a “very solid set of numbers.” While the stock has already seen a sharp move, the recommendation remains to accumulate on corrections rather than chase momentum blindly.

SBI Securities is also constructive on smaller NBFC names such as Mahindra & Mahindra Financial Services LTd and Northern ARC Capital Ltd.