Input costs and competition weigh on paint sector: Mayuresh Joshi
«Improved efficiency in collections over the next few quarters should positively impact asset quality, leading to reduced provisioning needs and boosting bottom-line growth, ROAs, and ROEs. Therefore, within the NBFC sector, microfinance is not advisable at this moment, but qualitative stocks like Chola are worth considering,» says Mayuresh Joshi, Head Equity, Marketsmith India.
Suffice it to say, it's a big avoid for MFI right now?
Mayuresh Joshi: Yes, and with regulatory concerns still looming, there is always a risk that potential regulatory actions could cast doubts on how these balance sheets might evolve, especially in terms of earnings if restrictions are imposed. Within this space, however, some housing finance companies have performed well. At Marketsmith, we focus on leading stocks, so within the broader NBFC universe, particularly from a rural discretionary spending perspective, Chola Investment and Finance could be a strong option. Our analysis suggests that Chola’s exposure, its strong parentage, and its capital adequacy, reflected in Tier I ratios, point to decreasing asset quality pressures as the rural economy strengthens. Improved efficiency in collections over the next few quarters should positively impact asset quality, leading to reduced provisioning needs and boosting bottom-line growth, ROAs, and ROEs. Therefore, within the NBFC sector, microfinance is not advisable at this moment, but qualitative stocks like Chola are worth considering.
We have to address Asian Paints. The stock opened with
