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Digant Haria, Founder of GreenEdge Wealth Services, sees a clear opportunity in NBFCs, particularly within the gold loan segment. He believes the industry could achieve around 20% growth this year, with stronger players potentially clocking 30–40% growth.
Investors looking beyond the large banks and into small-cap financials, especially non-banking financial companies (NBFCs), stand a better chance of capturing alpha in the months ahead, says Digant Haria, Founder of GreenEdge Wealth Services.
Commenting on the recent quarterly numbers, particularly from public sector undertaking (PSU) banks like Union Bank of India and Punjab Bank (PNB), Haria stated that the broader context is key. “System growth at 9% itself is a very weak number for a country like India,” he said, adding that public sector banks growing slightly below the system average isn’t surprising. “System growth minus 2% is what the public sector bank is used to growing.”
While growth numbers in the banking system remain uninspiring, Haria expects momentum to return after the monsoon. “I think that one quarter later... we should see this number improving,” he said. Although he admitted that current data “does not instil confidence,” he emphasised that “improvement is coming on its face.”
Where he sees a clear opportunity is in NBFCs, particularly in the gold loan segment. “Gold loan as an industry this year can easily do 20% growth,” he said, while “good players can easily do 30-40% growth.” Haria said IIFL, after a long regulatory ban, is poised for a comeback. “Growth will come back in IIFL... the stock price is yet to react,” he stated, highlighting that the liability side takes time to stabilise even after policy clarity returns.
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He also pointed to microfinance and personal loan-focused lenders as a bright spot. “This entire high lending space... has gone through a lot of pain,” he said. With regulatory cycles stabilising and asset quality bottoming out, he expects strong earnings upside. “The space between that one lakh to five lakh kind of a personal loan ticket size... should do well,” he added.
Among banks, Haria mentioned AU Small Finance Bank and RBL Bank as well-positioned, while in the NBFC space, he flagged Northern ARC Capital, Fedbank Financial Services, Ujjivan Small Finance Bank, Equitas Small Finance Bank, and SBFC Finance
as names to watch. “Anything in gold loans should generate decent alpha,” he said.
On the other hand, he flagged caution in commercial vehicle financing. “The CV finance... we have finished a three-year cycle,” he said, warning of slower growth ahead in that segment.
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When asked about positioning between PSU and private banks, Haria sees little difference in terms of returns. “All of them will give you market returns, maybe 10 to 15%,” he said, suggesting investors use exchange-traded funds (ETFs) for broad exposure. “There is no real big case of saying that this is better than that.”
On IndusInd Bank, Haria was clear that the turnaround narrative is not convincing yet. “There is no pot of gold in IndusInd Bank,” he said, stating that the business is “really, really affected” and recovery could take “four quarters” even in a good cycle. He believes the stock is better suited for short-term traders, while long-term investors should look elsewhere. “There are better, smaller bets... to take than IndusInd Bank,” he concluded.
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For the entire interview, watch the accompanying video
(Edited by : Unnikrishnan)
