Revival in investor sentiment for NBFCs may be a long-drawn process

Liquidity has improved, but 20 out of 24 NBFC stocks are staring at an over 5% reduction in 12-month target prices.

Going by news reports, there’s an on ground improvement in the operating climate for non-banking finance companies (NBFCs). Companies are lately speaking about easing of liquidity squeeze, helping cost of funds incrementally soften from the peak of November 2018. Yet, the Street doesn’t seem to be pleased with these bettering parameters.

Going by a Bloomberg poll of analysts, nearly 22 out of 24 NBFC stocks are faced with a continued downgrade in their 12-month target prices and over 20 of them have seen a sharper downgrade in likely price appreciation (target prices) in the past six months. While troubled names