BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
We expect our coverage universe of non banking financial companies – lending financials to deliver 16% /16%/21% YoY growth in net interest income/pre-provision operating profit/profit after tax, respectively, in Q2 FY23.
While the narrative around a sharp spike in short-term interest rates has gained headlines, it has not adversely impacted the margins for our NBFC coverage universe because of lower proportion of short-term borrowings and well-matched fixed rate assets/liabilities.
Seasonal weakness in asset quality, usually expected in the H1 of the fiscal year, was notably absent in H1 FY23.
We expect asset quality to remain broadly stable for the vehicle financiers while we expect housing finance companies to report a minor sequential improvement (except for LIC Housing Finance Company Ltd., where we expect slippages from the restructured pool).
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