NBFC stocks: Daljit Kohli sees valuation opportunity after sell-off; Shriram Finance in focus

Non-banking financial companies may face some near-term pressure from rising interest rates, but market expert Daljit Kohli believes the sell-off has opened up a valuation opportunity in select names across vehicle finance, housing finance and microfinance. His core argument: a 25-basis-point rate increase is unlikely to derail lenders that still have liquidity, demand visibility and improving asset-quality trends.

Speaking against the backdrop of an RBI rate hike and a choppy equity market, Kohli said the impact on NBFCs is “slightly negative”, but added that many stocks in the space are now available at “very comfortable valuations”.

Why the rate shock may not be a deal-breaker
Kohli’s most pointed observation was on Shriram Finance, which he described as a company “flush with so much of money” and therefore in a position where it is actively looking to deploy capital for growth. In such cases, he argued, “hardly twenty-five basis point increase or decrease will not going to make much difference” if underlying credit demand remains intact.

That view is significant because it shifts the debate from pure cost-of-funds pressure to balance-sheet strength and loan demand. In a tightening cycle, investors often punish lenders indiscriminately. Kohli’s reading suggests the market may be overlooking the resilience of well-funded NBFCs with established franchises.

Valuation comfort after the correction
He noted that Shriram Finance has corrected from above Rs 1,000-1,100 levels to “nine hundred something”, making the stock look more reasonable relative to its growth trajectory. “Very comfortable valuation, growth trajectory perfectly okay,” he said, while stopping short of making a formal recommendation.

The broader takeaway is that price correction, rather than business deterioration, may now be driving the investment case in parts of the NBFC universe.

Housing finance and microfinance back in focus
Kohli also sees value in housing finance companies, a segment he said has “not done too much in last two, three years”. That underperformance, in his view, has left several names trading at attractive levels even as some continue to hold up well through market volatility.

Microfinance and small finance lenders could offer an even sharper cyclical recovery. Kohli said the cycle there has “totally turned”, with credit costs falling from severely elevated levels to just “few basis points”. If that trend sustains, the earnings rebound could be meaningful as these institutions mature into small finance banks and, eventually, larger banking platforms.

Stock-picking over sector fear
The larger message fits Kohli’s broader market stance: this is not a time for sweeping top-down calls, but for selective stock-picking. In financials, that means looking beyond the headline impact of higher rates and focusing instead on liquidity, demand, credit costs and valuation comfort. For investors navigating a volatile market, NBFCs may no longer be a uniform risk trade — they may be a selective opportunity.