New Delhi, Sept. 23 -- Rising borrowing costs and a possible increase in the Reserve Bank of India's (RBI) policy repo rate could put pressure on the profitability of non-banking financial companies (NBFCs), particularly vehicle financiers and microfinance lenders, while housing finance companies could benefit from higher interest rates, according to a report by JM Financial Institutional Securities.

In its thematic research report titled "The Rate Hike Playbook for NBFC/HFCs", JM Financial said the impact of a potential rate hike would vary across lenders depending on their borrowing patterns and the type of loans they provide.

"We expect the impact of a rate hike cycle on the NBFCs to be uneven, largely due to differences in their ass...