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    Some regulatory tightenings are indications of future potential: 6 NBFC stocks with upside potential of up to 44%

    Synopsis

    One change for making higher provision for unsecured loans and we see all the NBFC stocks tumbling. The short term reaction of the street is a mix of two things. First the technical position in the markets, whether the stock or sector has seen a recent runup or not and secondly emotional one without understanding the working of a sector or a company. Sometimes these short term reactions are opportunities as the macro picture of the sector is far better and stronger as compared to what is being perceived in the short term due to one action or the newsflow.

    When a regulator intervenes it can be a sign of potential growth, which the regulator by his own action is just trying to slow down the fast pace of growth in that segment so that it does not create disturbance in the short term. The recent intervention by the RBI in order to ensure the rate of growth in the unsecured lending segment comes down is a very clear indication of the demand of that kind of product. It is a different thing that in the
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