Asset-backed NBFCs set to outperform NBFC space: Sandeep Shenoy

In a chat with ET Now, Sandeep Shenoy, Head - Equity, PINC Research, shares his views on different sub-categories of NBFC sector.

ET Now: Let us broadly divide the NBFC space into two or three large part — wholesale NBFC companies, rural-based NBFC companies and consumer-based NBFCs such as Bajaj Finance. Where are you picking your spots in the NBFC space? Which sub-category of NBFCs has the highest scope to outperform?

Sandeep Shenoy: At the current juncture, considering that the capex could be slowly moving and quite a lot of stuck projects could be getting revived, it is the asset-backed NBFCs which could be having advantage over others. There was some valuation mismatch. The consumer-facing NBFCs have seen some correction vis-à-vis the markets. But the correction is not as much harsh as in the asset-backed NBFCs.

Meanwhile, you have commercial vehicle financials, which are neither here nor there. Therefore, at the current juncture asset backed NBFCs would be the better bet amongst all the three players in the pack.