Brokerage firm Mirae Asset Sharekhan has buy recommendations on 11 stocks from the banking, financial services, and insurance (BFSI) space after the Q1 results of the financial year 2026-27 (FY27) wherein NBFCs (non-banking financial companies) and AMCs (asset management companies) reported healthy numbers, while the numbers of insurance companies were a mixed bag.
Sharekhan, in its recent report, highlighted that NBFCs began FY27 strongly, thanks to faster loan growth, expanded margins, and lower credit costs.
"Diversified lenders, vehicle financiers, and gold loan providers led profitability, while HFCs (housing finance companies) improved and power financiers lagged. Overall, credit costs fell, and asset quality improved," said Mirae Asset Sharekhan.
Sharekhan said diversified lenders reported robust AUM (asset under management) growth of 25% year-on-year (YoY) and 6.6% quarter-on-quarter (QoQ), with PPoP (pre-provision operating profit) rising 27% YoY and 8% QoQ, along with a fall in credit costs, which drove PAT at robust 33% YoY and 10% QoQ growth.
Diversified financiers expanded NIM (net interest margin) by 21 bps YoY and 6 bps QoQ (% of AUM) due to a favourable product mix
"Life insurers delivered strong numbers, driven by protection products, but general insurers faced profit hits from a slump in the fire segment and court-mandated reserve adjustments," said the brokerage firm.
Sharekhan underscored that the NBFC sector began FY27 with a strong footing, driven by robust loan growth across diversified lenders, gold financiers, vehicle financiers and affordable HFCs.
The brokerage firm believes cleaned-up balance sheets and reduced credit costs will also drive profitability, supporting sustained, healthy growth despite temporary Q2 softness.
However, the brokerage firm underscored that the RBI’s proposal to ban revolving credit could impact growth, disproportionately affecting specific lenders and segments that rely on revolving facilities.
Mirae Asset Sharekhan has buy recommendations on the following 13 stocks from the BFSI segment:
Can Fin Homes | Previous close: ₹810.10 | Target price: ₹1,100 | Upside potential: 36%
L&T Finance | Previous close: ₹315.85 | Target price: ₹380 | Upside potential: 20%
Bajaj Finance | Previous close: ₹1,077 | Target price: ₹1,250 | Upside potential: 16%
Cholamandalam Investment and Finance Company | Previous close: ₹1,846.70 | Target price: ₹2,100 | Upside potential: 14%
Mahindra and Mahindra Financial Services | Previous close: ₹378.70 | Target price: ₹420 | Upside potential: 11%
