BFSI Q4 Results Preview - Yet Another Strong Quarter: Axis Securities

Axis Securities Report

Banks - We expect the banks under our coverage to mirror the strong systemic credit growth, thereby delivering a robust ~17% YoY credit growth in Q4 FY23. On a segmental basis at a systemic level, consumer durables, personal loans, credit card outstanding have shown a robust growth of 39/21/30% YoY respectively. Banks that have so far reported their provisional numbers for the quarter have witnessed a pick-up deposit growth, led by term deposit growth outpacing current account savings account deposit growth. While most banks have so far been upbeat about sustaining their credit growth momentum, comments around deposit mobilization to support healthy credit growth will be watched out for.

Microfinance – The focus in the microfinance segment continues to remain on accelerating growth, driven by strong new customer acquisition and improving geographic footprint.

Small Finance Banks – Disbursements growth momentum continued to remain strong, translating into healthy advances growth. For the SFBs under our coverage, the traction on liability franchise continued to remain strong with TDs outpacing CASA deposits growth.

Non banking financial companies – The disbursement momentum for affordable housing financiers is likely to sustain, translating into healthy assets under management growth.

Gold Financiers - Under our coverage are expected to report tepid goldloan growth. However, on a consolidated basis, AUM growth is likely to pick up.

Diversified Financials –

Credit cards - The new customer additions have been progressing well with SBI Cards and Payment Services Ltd. adding ~300,000 plus customers (net) in both January-February 2023 and we expect the company to maintain the pace in March 2023.

Broking - Revenues will continue to remain under pressure with cash market volumes remaining muted while F&O volumes continue to remain robust.

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