JP Morgan sees earnings tailwind for India's non-bank lenders

** India's non-bank lenders are set to benefit from widening net interest margins as funding costs reprice faster than fixed-rate loans, says J.P. Morgan

** Brokerage notes that non-banks have outperformed banks in 2025 so far, largely due to valuation rerating, a pattern seen in past rate cut cycles

** While earnings prospects look strong, many lenders are already trading near the upper end of their historical valuations, which could cap further gains until earnings are revised higher in the upcoming quarters

** J.P. Morgan assumes coverage with "overweight" ratings on Shriram Finance NSE:SHRIRAMFIN and Mahindra & Mahindra Financial Services NSE:M&MFIN

** Assigns "neutral" on Bajaj Finance NSE:BAJFINANCE and Cholamandalam Investment NSE:CHOLAFIN, and "underweight" on SBI Card NSE:SBICARD

** Also upgrades L&T Finance NSE:LTF to "neutral" from "underweight"

** The brokerage highlights Bajaj Finance's diversified loan book and customer growth as strengths, while citing improving microfinance trends at LTFL

** On the day, BJFN and LTFL rise 1% each, CHLA gains 2.4%, MMFS edges up 0.4%, and SBIC slips 0.3%