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Nomura bullish on Bajaj Finance, Tata Capital, L&T Finance, Shriram Finance despite headwinds
M
Moneycontrol•01-10-2026, 13:06
Nomura bullish on Bajaj Finance, Tata Capital, L&T Finance, Shriram Finance despite headwinds
- •Nomura maintains 'Buy' ratings on Bajaj Finance, L&T Finance, Tata Capital, and Shriram Finance, and Aadhar Housing Finance.
- •The brokerage expects 1-12% EPS cuts for covered NBFCs over FY27F-28F due to rising funding costs, with a potential 1-8% hit to FY27F EPS if RBI raises rates by 50-60 bps.
- •Bond yields for AAA-rated and AA+ rated NBFCs have increased by 29-70 basis points since the RBI's hawkish stance on August 19.
- •Nomura anticipates bond market activity to increase in H2 FY27, albeit at a higher cost, with AAA-rated three-, five-, and 10-year bond yields at 8.2-8.4% as of September 29.
- •Despite regulatory concerns and rising rates, Nomura believes NBFCs' structural strengths remain intact, supported by a healthy mix of floating-rate assets and shorter-tenure fixed-rate loans.
Key Questions Answered
Nomura prefers Bajaj Finance, Tata Capital, and L&T Finance among diversified NBFCs, Shriram Finance among vehicle financiers, and Aadhar Housing Finance among housing financiers, maintaining a 'Buy' rating on all of them.
Nomura expects that if the RBI raises rates by 50-60 basis points, covered NBFCs could face a 1-8% hit to their FY27F earnings per share, with pressure easing in subsequent years as lending rates rise.
Nomura views recent regulatory developments as more concerning, specifically highlighting insurance distribution reforms affecting credit-life insurance policies and regulatory hesitation surrounding flexi loans.
