BQ Blue'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 BloombergQuint'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 finance company – lending financials to deliver 10% /6%/35% YoY growth in net interest income/pre-provision operating profit/profit after tax, respectively, in Q4 FY22.
In general, Q4 of a fiscal year is a seasonally strong quarter in terms of asset quality and we expect Q4 FY22 to be no different. We forecast a stronger improvement in asset quality for Cholamandalam Investment and Finance Company Ltd., Mahindra and Mahindra Financial Services Ltd. and Aavas Financiers Ltd. while the improvement for the other NBFCs/ housing finance companies in our coverage will be more measured.
Importantly, we expect credit costs to be sequentially lower during the quarter except for Mahindra Finance.
Despite the Reserve Bank of India clarification on the non-performing asset circular and the subsequent deferment of the guidelines' implementation to September 2022, most companies that have implemented the circular already (in Q3) will continue to follow the same classification methodology in Q4 FY22.
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