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Motilal Oswal Report
In early FY24, non-banking financial companies/housing finance companies benefitted from anticipated interest rate cuts, which could happen in the later part of the fiscal year.
However, the broader consensus emerging today, from both the Reserve Bank of India MPC meetings and the FOMC meetings is that interest rate cuts are not on the horizon in the near term, despite the easing of persistent inflationary pressures.
Adding to the challenge, the RBI rist weighted assets's circular on bank term loans to NBFCs has resulted in a rise (in varying quantum) in borrowing costs for the NBFCs, affecting their net interest margins.
As a result, NIM stabilisation/expansion has been further delayed by one/two quarters.
NBFCs, with a presence in personal loans, have started calibrating their loan growth trajectory, expressing a clear intention to cut down on lower ticket personal loans and/or Buy-Now-Pay-Later.
In response to the RBI's dissatisfaction with the lending yields of MFIs, many NBFC-MFIs have voluntarily cut their lending rates (in few instances by ~50 bp) on new loans.
We highlight the key trends shaping sub-sectors below and then present a curated tabular representation of important guidance/insights given by each of the companies in our NBFC coverage universe.
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