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Nirmal Bang Report
Nirmal Bang expects its coverage banks to report net interest income/pre-provision operating profit/ net profit growth of 9.9%/12.1%/8% YoY respectively due to lower margins on a YoY basis. However, on a sequential basis, it estimates coverage banks' NIMs to improve by 6bps due to re-pricing of TDs. Opex ratios are expected to improve by 111bps QoQ. Credit costs for the brokerage's coverage banks are expected to decline by 24bps YoY to 1.1%.
Gold loan NBFCs are expected to see strong loan growth and lower credit costs due to elevated gold prices during Q4 FY26. However, tonnage growth and client additions will be a monitorable.
In the case of specialized NBFCs like HUDCO, as per its exchange disclosure, it saw 28.8% YoY and 27.9% YoY growth in sanctions and disbursements in FY26. However, the bottom line is expected to grow at a lower rate of 8.3% YoY, as Nirmal Bang has expected a MTM loss of Rs 2 billion on its forex borrowings due to exchange rate volatility during the quarter.
In the HFC space, large HFCs are facing increased competition from banks which have aggressively positioned themselves in the prime lending space. Affordable HFCs are better placed with better pricing power in segments and geographies they operate in.
Nirmal Bang expects its coverage HFCs to report a loan/earnings growth of 8.3% YoY/4.3% YoY, respectively.
In the brokerage's view, the following will be the key monitorables from bank's/NBFC's Q4 FY26 results:
- Loan growth and NIM guidance in the midst of global headwinds due to geopolitical issues,
- Commentary on deposit mobilisation including the launch of new products, branch expansion and cross selling strategy, and
- Asset quality outlook especially in the case of MSMEs and unsecured loan segments.
Nirmal Bang top picks: SBI, HDFC Bank, Axis Bank, Federal Bank, City Union Bank, Can Fin Homes, Home First Finance.
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