Financial Services Sector Check - Commercial Vehicle Financing Recovery By Q4: Prabhudas Lilladher

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Prabhudas Lilladher Report

Our interactions with most experts in commercial vehicle financing space indicate full recovery expected by Q4 FY22.

While regulatory dispensations (moratorium, micro, small and medium enterprise restructuring, Emergency Credit Line Guarantee Scheme) masking true asset quality picture stand behind (September 2021), customer repayments will flow through Q3 FY22 onwards.

As underlying economic indicators are already showing signs of improvement with receding third wave fears, repayments can normalise by Q4 FY22 subject to consumption trends pacing up.

Heavy commercial vehicle to observe cyclical uptick over next two years. Its borrower segment is better placed than small commercial vehicles as the latter's repayment capacity stood ruptured due to lockdown disruptions during April-May 2021.

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