NBFCs Q4 Results Preview - Strong Growth Momentum; Continued Pressure On NIMs: Nirmal Bang

Nirmal Bang Report

While growth in unsecured loans has tapered off, we expect covered non-banking financial companies to deliver strong loan growth, driven by housing/loan against property segments, used vehicle finance and diversified portfolio. We reiterate Shriram Finance Ltd. and Aavas Financiers Ltd. as our top ‘buys’ in this space.

While growth in the used commercial vehicle portfolio is expected to support margins for CV Financiers, rating upgrades and National Housing Bank refinance will help control the cost of borrowings for housing finance companies. Opex is likely to remain elevated.

While the asset quality environment remains benign, we expect certain pockets of stress in CV Finance, tractor finance and fintech lending.

In our view, following will be the key monitorables from Q4 FY24 results of NBFCs –

1. Growth guidance, especially for FY25/FY26,

2. NIM movement in subsequent quarters,

3. Asset quality and collection efficiency trends.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.