“Gold financers have really seen a stupendous run reflecting the underlying gold price accretion that we saw since over a year now. Going forward, we believe structural players like Muthoot Finance will still continue to see good traction on the growth front purely because one, it being a market leader. Two, the internal productivity gains continue to support growth. Three, despite not tweaking their yields or interest rates, they have been able to catapult growth above 20% odd levels,” said Daptardar.
She added that Muthoot’s valuations have caught up well, trading above 3X forward multiple, yet she continues to recommend “accumulating on every dip” as earnings remain supported by both growth and asset quality. For Manappuram, she noted that much of the rally has already been priced in, and the next phase of rerating will depend on the new management’s execution and strategy.
Turning to the broader NBFC space, Daptardar said the ongoing rate cut cycle is a significant tailwind.
“Q2 earnings are already reflecting the transmission of rate cuts happening from the bank’s end. Most NBFCs that have declared numbers till date have seen a material decline in interest cost and cost of funds on a sequential basis,” she explained.
According to her, consumer financiers and gold financiers with shorter tenure loans stand to benefit the most. “Rate cuts coupled with GST simplifications and the consumer finance or personal loan pain cycle standing behind definitely augur well for many players,” she said, naming Bajaj Finance, Piramal Finance, Poonawalla Fincorp, and L&T Finance as top picks.On microfinance institutions (MFIs), Daptardar believes the turnaround is finally underway.“While asset quality challenges are looking to bottom out, the focus has shifted to business augmentation. But the good news is that 89% of the borrower base now have only two loans per borrower, and only 7% carry over three loans. Collection efficiencies have gone above 95% levels,” she said, highlighting improving health in the sector.
She also pointed to policy easing and timely government intervention amid tariff uncertainties as supportive factors for MSME credit growth. “We certainly believe MSME credit will start picking up more so in the second half of this fiscal,” she added.
Discussing high-flying names like Shriram Finance and Bajaj Finance, Daptardar dismissed the idea that the rally is over.
“I still believe this is only the halfway rally. If you look at the price-to-book multiples of the last three years vis-à-vis the forward multiple, there’s still room for upside. What we have seen is just a hope rally — the fundamental growth, NIM, and asset quality positives are yet to reflect fully in earnings,” she remarked.
With GST benefits and rate cuts expected to show more prominently in Q3 and Q4, she sees the next leg of the rally being earnings-driven.
On the power financiers, Daptardar acknowledged the recent consolidation in PFC and REC stocks after a strong multi-year run.
“There has been a slight cooling off period as far as valuations, largely due to the sheer scale of their loan books — around five to six lakh crore — making exponential growth difficult. Even 10–12% growth on such a base is commendable,” she explained.
She noted that election-year delays in project execution have also played a role in slowing disbursements. However, she remains optimistic about the long-term structural story for the power sector.
“Going forward, we expect 12–13% growth on a steady-state basis. Power is a long-term story, with levers such as storage, data centers, and nuclear energy coming into play. At current valuations around 1X and ROEs of 18–19%, both PFC and REC should be part of every portfolio,” she concluded.
As the NBFC universe adapts to a softer rate environment, easing policy landscape, and improving credit health, analysts like Daptardar see the second half of FY26 as a period of earnings-led expansion — not just for gold and consumer lenders, but across the financial ecosystem.