Jefferies remains positive on select NBFC stocks as auto-finance disbursements stay resilient, asset quality holds up and some lenders gain market share in commercial vehicles. The brokerage's preferred names are Bajaj Finance, Cholamandalam Investment and Finance, Aditya Birla Capital and Shriram Finance.
In its recent India Consumer Finance report, Jefferies said auto disbursements have remained resilient despite the seasonally weak September quarter-to-date. Better vehicle demand and utilisation compared with last year should support growth, although the brokerage cautioned that the year-on-year base is becoming tougher.
Jefferies also expects non-auto segments to contribute to overall growth, favouring diversified NBFCs over lenders with concentrated exposure to a particular segment.
Chola Finance, Shriram Finance Gain CV Share
Cholamandalam Investment and Finance and Shriram Finance appear to be gaining CV market share as captive financiers and elective NBFCs pull back, according to Jefferies.
The brokerage estimates vehicle finance loans stood at around Rs 21 trillion as of June 2026, accounting for about 11% of total credit. NBFCs have a dominant position in commercial vehicle financing, with around 65% market share, making changes in competitive intensity particularly relevant for lenders such as Chola Finance and Shriram Finance.
Jefferies said CIFC and Shriram Finance are among the auto financiers best placed to benefit from these market-share trends.
Bajaj Finance, AB Capital Remain Top Picks
For investors looking beyond pure auto financiers, Jefferies prefers Bajaj Finance and Aditya Birla Capital, citing their diversified businesses and relatively lower exposure to rural risks.
The brokerage expects asset quality to remain stable across the sector, with scope for credit-cost beats if current trends persist. However, it remains watchful of monsoon-related risks, particularly for lenders with greater rural exposure.
For Bajaj Finance, the combination of diversified growth and lower rural exposure remains the key attraction. AB Capital similarly offers diversified exposure to consumer finance, with Jefferies seeing potential for stronger-than-expected credit costs to support earnings.
Jefferies also said asset quality trends and collections have remained resilient in recent weeks, creating scope for a credit-cost beat. Fresh credit costs remain manageable, although the brokerage remains watchful of monsoon-related risks.
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