September 26, 2018 / 7:14 AM / 23 days ago

BUZZ-India NBFCs' liquidity situation manageable; HDFC, LTFH top picks - Citi

** NBFC stocks witness sharp sell-off in the last few days due to concerns regarding roll over of short-term credit and availability of funds, says a Citi Research report

** While borrowing costs may rise going forward as investors become more cautious, the liquidity situation for NBFCs under its coverage manageable - Citi

** Don’t see near-term liquidity risks for most cos under coverage based on whether inflows/asset maturities over the next year exceed outflows/liability maturities - Citi

** Higher market yields may raise borrowing costs and put NBFCs’ NIM under pressure, especially those that are more dependent on market borrowing, Citi analysts add

** HDFC Ltd and L&T Finance Holdings Ltd top picks; HDFC has strong funding franchise with access to deposits and other options, while LTFH has been delivering well on its shift towards retail lending - Citi

** Shares of HDFC rise as much as 1.9 pct to 1,806.30 rupees, with over 2.4 mln shares changing hands vs 30-day avg vol of 3 mln shares

** L&T Finance Holdings’ shares rise as much as 3.8 pct to 137.15 rupees, with over 7.9 mln shares being traded vs 30-day avg vol of 8.7 mln shares

** While HDFC stock up 3.7 pct this year as of last close, that of L&T Finance Holdings down 24.1 pct

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