He is particularly bullish on diversified lenders such as Tata Capital, Piramal Finance, Bajaj Finance and Aditya Birla Capital to benefit from strong credit demand, easing funding costs and resilient asset quality. The Reserve Bank of India’s (RBI) recent policy actions may support profitability across the sector, he added.
NBFCs have already outperformed larger banks in the last financial year ended March 2026. The combined growth of the 24 shadow banks analysed by JM Financial, a Mumbai-based broking firm, was 22% in FY26, compared to the 7% growth in the 16 banks under its coverage.
Tata Capital and Piramal Finance are Kumar’s preferred picks.
More than 60% of Tata Capital’s loan book is linked to housing and corporate lending, while over 60% of Piramal Finance’s retail portfolio is concentrated in housing and loan-against-property products.
With a credit rating of AAA-, Tata Capital has access to cheaper funding than many of its peers, while Piramal Finance has significantly reduced its legacy wholesale exposure.
HDB Financial Services remains fundamentally strong but expects its loan growth to trail peers at around 15-16%, making Tata Capital and Piramal Finance more attractive opportunities at present, in Kumar’s view.
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