Mirae Asset Sharekhan: 11 BFSI Stocks for Long-Term Investment
By Business Desk
Mirae Asset Sharekhan recommends 11 BFSI stocks for long-term growth, citing strong Q1 FY27 results, cleaned balance sheets, and improved margins.
Mirae Asset Sharekhan has issued “buy” recommendations for 11 Banking, Financial Services, and Insurance (BFSI) stocks, projecting significant long-term gains. This positive outlook follows strong financial results observed in Q1 FY27 across key segments.
Non-Banking Financial Companies (NBFCs) and Asset Management Companies (AMCs) demonstrated particularly robust performance in the first quarter of fiscal year 2027. Conversely, insurance companies presented a mixed performance during the same period.
Key Drivers for Growth
- Cleaned-up balance sheets across the sector.
- Lower credit costs contributing to improved profitability.
- Robust growth in loan portfolios for NBFCs.
- Improved margins for financial lenders.
- Reduced credit costs observed in the NBFC segment.
Diversified lenders, vehicle financiers, and gold loan providers notably led in profitability among NBFCs. Life insurers also reported strong figures, primarily propelled by protection products.
Segmental Performance and Concerns
General insurers experienced profit declines, attributed to a slump within the fire segment and court-mandated reserve adjustments. The brokerage anticipates continued healthy growth for the BFSI sector, despite a potential temporary slowdown in Q2.
A significant concern highlighted is the Reserve Bank of India’s (RBI) proposed ban on revolving credit. This regulatory change could negatively impact growth for lenders heavily reliant on such facilities.
Recommended BFSI Stocks
- NBFCs: Can Fin Homes, L&T Finance, Bajaj Finance, Cholamandalam Investment and Finance Company, Mahindra and Mahindra Financial Services.
- Insurance: HDFC Life Insurance Company, ICICI Prudential Life Insurance Company, Max Financial Services, ICICI Lombard General Insurance Company.
- AMC: Nippon Life India Asset Management.
- Holding/Investment: Bajaj Finserv.
The firm expects the sector to maintain its growth trajectory, underpinned by stronger financial health and operational efficiencies, even with anticipated short-term market adjustments.