Three NBFC stocks at attractive valuations

Capital First, Chola Investment and L&T Finance stand out for their unique business model and reason

While banking channel credit growth remains anaemic, the performance of non-banking finance companies (NBFCs) is noteworthy. They remain notches ahead of banks in demonstrating strong growth.

 
For an investor, while the 'me-too' model of pure-play housing finance companies (HFCs) might limit the scope for incremental growth, NBFCs outside this basket could offer higher return and diversified growth. From this standpoint, stocks such as Capital First, Cholamandalam Investment & Finance and L&T Finance offer uniqueness.
 
Importantly, trading at 2.5-2.8 times the FY19 book, these stocks are still affordable as compared to larger peers such as Bajaj Finance and HDFC.