Pick Dewan Housing Finance Corporation on dips: Mayuresh Joshi

Mayuresh Joshi of Angel Broking told CNBC-TV18, "The NFBC space had got heated up and the valuations probably were trading at average mean highs. Having said that, probably for the sector as a whole, if you have the different sub-segments come into play, within the NBFC space itself, there are housing finance companies, there are rural equipment finance companies."

"You have probably got the other set of NBFCs which also cater to the microfinance part itself. But a huge run up had probably happened onto these stocks and somewhere the valuations probably were looking on the higher side. But having said that, selectively, within the NBFC space, housing space for example, something like a Dewan Housing, if it corrects further, incrementally some part of your money can go into this stock because the kind of money that they have probably raised, the kind of leverage they can deliver over the next few years can be quite substantial. Our own sense is 21 percent earnings growth now ruled out. So Dewan Housing probably looks very interesting within the housing space on further declines."

"Rural financing companies look very promising at this point of time. With good monsoons expected to come through and expectations of good discretionary spending from rural side, they are probably going to get a huge amount of offtake in terms of demand for agri equipments, seeds, fertilisers, so on and so forth. So again selectively companies like Mahindra and Mahindra Financial Services which have probably reported asset quality to the tune of 8-9 percent even touching double digits over the past few quarters, that pain can very well continue for the next 2-3 quarters. But again looking at the way the government is moving and expectations of the ex-chequer in the next Budget being more rural friendly and rural focused, these companies should also do well. So any decline selectively within these spaces itself, a bottom up approach can be adopted."