Investors should use rallies to exit weaker NBFC stocks, say experts

Bajaj Finance, HDFC most preferred; analysts favour shift to high-quality banks

Stocks of non-banking finance companies (NBFCs), among the biggest losers in the recent carnage, undoubtedly benefitted from Wednesday’s market rally,  as they gained up to  16 per cent. The good spell did lift these well above their 52-week lows.

Yet, experts urge investors to use such rallies to exit from the weaker names. “As liquidity crunch is here to stay, at least in the medium term, earnings are likely to be weak for the sector. Investors should use relief rallies such as Wednesday’s to exit from the weaker NBFC stocks,” says Pankaj Pandey, head of research at ICICI Securities.

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