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Motilal Oswal Report
We expect systemic loan growth to remain robust in Q4 FY23, with a healthy credit growth of 15.7% YoY in March 2023, driven by continued traction in the retail and small and medium enterprise segments. The corporate segment has also witnessed a gradual recovery, though a pick-up in capex would be key to sustain growth momentum.
Home, vehicle, unsecured, and small business segments continue to do well, while demand for commercial vehicle is also improving. The credit card business is seeing healthy momentum, with robust growth in spends.
We will watch out for any change in the demand environment, given the challenging macro situation, elevated inflation, and a high base effect.
We estimate systemic loan growth of 15.7/13.3% in FY23/24.
Deposit rates have increased sharply over the past few months, with liability accretion gaining importance. However, the gap versuss credit growth still remains high.
While we expect a stable-positive bias in margins in Q4 FY23, the rise in the cost of deposits and further rate hikes would influence the margin trajectory in FY24. Margins are likely to see some pressure in FY24, in our view.
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