2 days Ago
Motilal Oswal Financial Services (MOSL) has expressed optimism over the banking and non-banking financial services (NBFC) sectors, citing robust fundamentals, macro resilience, and supportive regulatory developments. In a recent strategy note, the brokerage said that banks are poised to outperform due to strong balance sheets and effective navigation of economic uncertainties, while NBFCs are expected to rebound on the back of rate cuts and improved regulatory clarity. Banks and NBFCs Set for Revival, Says MOSL According to MOSL, banks are well-positioned to outperform, supported by resilient balance sheets and an ability to manage macroeconomic headwinds.
The brokerage added that NBFCs, which have recently witnessed moderation, are likely to pivot back to growth, driven by expected repo rate cuts and a more accommodative regulatory stance. Given the healthy growth outlook and reasonable valuations, MOSL said it has curated a focused basket of banking and NBFC stocks. Kotak Mahindra Bank : MOSL highlighted Kotak Mahindra Bank for its steady performance over the past year, with stable profitability and robust margins.
The lifting of regulatory curbs by the Reserve Bank of India (RBI) is seen as a key trigger for a renewed pickup in growth and profitability. MOSL said the bank’s consumer banking franchise is expected to see stronger traction going forward. Cholamandalam Investment : MOSL noted that Cholamandalam Investment & Finance is well-placed to benefit from a falling interest rate cycle, with management guiding for NIM expansion and improved margins in vehicle finance.
The company’s foray into personal and business loans through its digital platform, along with a diversified lending portfolio, supports a projected 24 percent AUM CAGR between FY24 and FY27, according to MOSL. Paytm : Paytm (One 97 Communications) has weathered regulatory turbulence and continues to scale its loan distribution through FLDG partnerships, said MOSL. The brokerage pointed out that the fintech has retained a solid merchant base of 43 million (up 9 percent YoY), and with 85 percent of GMV driven by merchants, expects a 24 percent GMV CAGR and 25 percent revenue CAGR over FY25-27, led by growth in financial services.
Poonawalla Fincorp : MOSL highlighted Poonawalla Fincorp’s strategic pivot toward becoming a multi-product lender, expanding its offerings from four to ten products. The company plans to roll out 400 new branches starting Q1FY26. MOSL expects this expansion to support AUM growth in the range of 30–40 percent over FY26-27.
PNB Housing Finance : PNB Housing Finance is targeting a retail loan book of around ₹ 1 lakh crore by FY27, aided by robust mortgage demand and renewed momentum in the government’s affordable housing scheme, PMAY. MOSL expects NIMs to improve to about 4 percent, driven by an enhanced product mix. The brokerage believes the lender is well-positioned to leverage the retail opportunity despite competitive pressures.
With improving macroeconomic signals, supportive regulatory trends, and the potential for interest rate easing, MOSL believes the outlook for banks and NBFCs remains constructive. The firm’s stock picks reflect confidence in the sectors’ ability to deliver sustainable growth, strong margins, and shareholder value over the next few years. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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