NBFCs: Navigating headwinds, outlook remains guarded

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NBFCs: Navigating headwinds, outlook remains guarded

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Diversified Financial Services - India

NBFCs: Navigating headwinds, outlook

remains guarded

Industry Overview

NBFCs remain cautious amid macro headwinds 17 June 2026

NBFCs are navigating an incrementally tighter funding environment amid headwinds Equity

from fuel inflation, sub-normal monsoons and El Nino, though they have entered this India

turbulent phase with a stronger AQ and more calibrated growth strategies. In the past, Diversified Financial Services

shallow rate hike cycles by themselves had limited impact on NBFC valuations (consol., Pujita Pasumarthi >>

BofA calculated), and we believe AQ resilience along with growth sustenance will be Research Analyst

critical factors to watch for in the current macro environment. Latest commentary (see BofAS+91 22India6632 3058

note, India conf takeaways - Resilient trends with emerging headwinds) from key NBFCs pujita.pasumarthi@bofa.com

reflects their enhanced focus on protecting AQ over driving growth in the near term. We

believe large, diversified companies with strong ALM, gold financiers and HFCs are

Key Abbreviations:relatively resilient in this environment, while rural-focused NBFCs (including vehicle

financiers, MSME lenders) and unsecured consumer lenders remain vulnerable. ALM – Asset Liability Management

Rising gold financing focus, risks: competition, gold prices AQ – Asset Quality

CV – Commercial VehicleWe observe a cautious NT growth across key NBFCs, although FY27 guidance remains

LT – Long Termlargely intact, with some companies expecting to deliver at least at the lower end of

NT – Near Termtheir guidance range. Across segments (i) gold financing has emerged as a key focus