Hold SKS Microfinance, says Kunj Bansal

Kunj Bansal of Centrum Wealth Management told CNBC-TV18, "As a disclosure, in terms of SEBI guidelines, I am not ready with the exact recommendation on SKS Microfinance but having said that the stock is under active coverage of Centrum research and we do have a view on that. Not only SKS Microfinance, in fact if we extend our horizon to other NBFCs before that Cholamandalam Investment and Finance Company also reported good numbers. In market there are mix views on whether Shriram Transport Finance Corporation's numbers were good or bad and similarly Mahindra & Mahindra Financial Services numbers were good or bad." "SKS Micro's numbers have been good, quite better than the good expectations which were there as well. If one was a trader, one would book profit but it is a stock worth holding for a long-term. If we look at it last two-three years, it has been consistently doing well both in terms of stock performance which obviously has been led by the company excellent financial performance and given the way the company's management has structured its business model after the upheavals which happened four-five years ago with the whole microfinance industry which we are all aware, I think the company is set to continue to do well," he said."Amongst the NBFC picks, the results are yet to come in Sundaram Finance. Cholamandalam Finance has reported very good numbers. This company is also in the similar business of largely vehicle financing. When one buys into Sundaram Finance, one also gets exposure to its holdings in business like home finances and businesses like insurance - Royal Sundaram General Insurance, business like mutual fund - Sundaram Mutual Fund. Having said that, coming back to the standalone business its large part of business comes from vehicle finance; company’s return on assets are closer to 2.6 percent which are inline with other well performing NBFCs." "Within the sectoral comparison, these return on assets are significantly higher than the public sector banks, return on assets which are anywhere in the range of 0 to 0.5 percent. Share trade setup price to book of 3-3.5 which one can possibly have a view and which is on the expensive side. However, if one looks at the consistent numbers that the company has been delivering and the exposure that one gets by buying into the share and three other business and the way results have been coming in the result, that should be good for this company as well is one of my recommendations," he added.