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Amidst all-round action in the Indian stock market, a very positive news is coming out regarding Non-Banking Financial Companies (NBFCs). Big market experts and leading brokerage houses believe that the NBFC sector is now standing at a major turning point and its comeback from here seems absolutely certain. The days of companies in this sector are going to be bright on the basis of strength in credit growth, increasing demand in rural and semi-urban areas and better asset quality. Meanwhile, brokerage firms have searched the entire industry and prepared a list of 19 favorite stocks, which can provide huge earnings to investors in the coming times. Big names like Shriram Finance and PNB Housing are leading in this list. All eyes fixed on Shriram Finance and PNB Housing. The two giants on which brokerages are looking most bullish in the recovery of this entire sector are Shriram Finance and PNB Housing Finance. Regarding Shriram Finance, a company which has a strong hold in the commercial vehicle and retail loan segments, experts say that its geographical expansion and post-merger synergy is now visible in the results. On the other hand, PNB Housing Finance has surprised the market by improving its asset quality and increasing focus on the retail home loan segment. According to brokerage reports, both these stocks are showing excellent upside potential from the current levels. Real action will be seen in these 19 stocks. Brokerage houses have prepared a strong basket of 19 stocks, not just two-four. This list includes companies like gold loan providers Manappuram Finance and Muthoot Finance, vehicle finance giant Cholamandalam Investment and Mahindra & Mahindra Financial Services. Apart from this, some small but aggressively growing companies in the housing finance and microfinance (MFI) segment have also found a place in this special list. Experts believe that the business model of these 19 companies is currently in a very strong position and they are going to directly benefit from the increasing demand for loans. There will be a boost from local demand and festive season. From Delhi, Mumbai, Lucknow, Patna to small towns and Tier-2, Tier-3 cities of the country, an unprecedented increase in demand for loans is currently being seen. Especially at the local level, the demand for two-wheeler loans, car loans, home renovation loans and MSME loans for small businesses has increased a lot. Since the reach of NBFC companies in remote areas of the country is easier and more flexible than traditional banks, the largest part of this local demand is going to the account of these companies. This demand is expected to increase further in view of the coming festive season, which will have a direct impact on the profits of these companies in the next quarters. What do market experts say and what should be your strategy? Top analysts at Dalal Street say that if you are looking to add some strong and cheap valuations to your portfolio for the medium to long term, then the NBFC space is the best place to be right now. Amidst the possibility of stabilization or reduction in interest rates, the cost of raising funds of these companies will reduce, which will improve their Net Interest Margin (NIM). Out of these 19 stocks selected by the brokerage, investors can choose large and safe large-cap or high-growth mid-cap stocks as per their risk profile. However, it is always a wise decision to consult your financial advisor before investing money in any stock.