Stocks to buy: JM Financial names 9 NBFC stocks as top picks amid rate hike cycle

While soaring bond yields and further rate hike worries spook investors of financial stocks, JM Financial has listed out nine NBFCs as its preferred picks. The domestic brokerage noted that investors must juxtapose the NIM dynamics with growth or asset quality trends to take a holistic approach in terms of stock selection amid the headwind of policy rate hike cycle. Here are 9 of its top stock picks and how they performed recently.

Aditya Birla Capital shares have gained 2% in a month and 25% in six months. In the longer term, the shares of the company recorded sharp gains of more than 41% in one year and 81% in two years.

Piramal Finance shares have surged 12% in the past month despite headwinds, and 15% over three months. In the medium term, the stock recorded strong gains of 27% over six months. The shares of the company debuted on the BSE at Rs 1,270 apiece in November last year, marking a 13% premium over the discovered price of Rs 1,124.20 per share.
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PNB Housing Finance shares have registered a minor dip of 1% over the past month and 15 days. However, the stock has delivered strong performance over longer horizons, advancing 13% in three months, 40% in six months, 32% in one year, and 5% over two years.

Aadhar Housing Finance shares have faced some pressure recently, dropping 4% in 15 days, 5% over one month , and 4% in six months. In the last one year, the stock declined 14%, while holding a modest 1% gain over two years.

Mahindra & Mahindra Financial Services shares have dropped 6% in 15 days and 9% over the past month. In the longer term, the stock has delivered positive returns, rising 19% in three months, 10% in six months, 24% in one year, and 11% over two years

Cholamandalam Investment and Finance Company shares have seen recent softness, dropping 3% in 15 days and 4% over a month. The company has maintained a steady trajectory over longer term, gaining 7% in three months, 18% in six months, and 13% in one year.

CreditAccess Grameen shares declined 3% in the last 15 days, 9% over a month, and 2% in three months. However, over a six-month duration, the shares surged 17%, while remaining flat (0%) over one year and gaining 12% over two years.
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Five Star Business Finance shares gained 1% in a month, and 4% in three months. Over six months, the stock posted a sharp 43% gain. Over the longer term, the shares however dropped 30% in six months.

Fedbank Financial Services (Fedfina) shares declined 2% over 15 days and 3% over three months, though they gained 3% in the past month. In the longer term, the stock recorded gains of 13% in six months, 4% in one year, and a substantial 30% over two years.Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.