NBFC stocks a lucrative longterm bet?

Even as commoners in India are recovering from the currency fiasco in India, the stock prices of several of the NBFCs have taken a huge hit in past few trading sessions. The stock prices for NBFCs have corrected anywhere between 20 per cent to 40 per cent since the recent development where PM Modi announced to ban the Rs 500 & Rs 1000 notes.

NBFC stocks viz., Bharat Financials, Bajaj Finance, Equitas, Ujjivan Financial Services are all trading in green in Wednesday’s trading session on an intraday basis. The stocks are up by anywhere between 4 per cent to 10 per cent.

Since the announcement of banning of Rs 500 & Rs 1000 notes the NBFC stocks have been correcting as the panic stricken customers were not able to repay the EMIs and there was a fear that the recovery will be difficult for these NBFCs.

However, from investors point of view, the heavy correction in the NBFC stocks presents an opportunity for long term investors. One of the positives that investors can focus on is the hope of rate cuts from RBI and positive expectation from the budget.