Experts wary of NBFC stocks
Chakri Lokapriya, CIO & MD at TCG AMC believes investors should stay away from NBFC stocks at this stage, as the whole problem started only sometime last month and September quarter earnings might still look good.
“You are going to have higher cost of funding, which will translate into lower net interest margins and lower loan growth, which will translate into lower multiples for these stocks,” he said.
NBFC stocks have traded at very high multiples in the past. Even now, after the correction in the multiples is still fairly not cheap enough, Lokapriya said.
At 2.30 pm, the stock of Repco Home was down 9.5 per cent at Rs 309.05 on the BSE. This was the fourth consecutive day of fall for the stock, which has fallen 18 per cent during the period.
Similarly, shares of Dewan Housing Finance fell today for the fourth day running. The stock has come off 28 per cent during the said period.
Indiabulls Housing has cracked 29 per cent in three sessions to Friday. Big players such as LIC Housing and HDFC have come down 4-5 per cent in the last 2-3 sessions.