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Motilal Oswal Report
Disbursement momentum held up well in Q3 FY22 even as the economy grappled with fears of a third Covid-19 wave in the last two weeks of the quarter.
We expect most of the affordable housing and vehicle financiers to report a decent improvement in disbursement volumes in Q3 FY22 sequentially. Despite this, assets under management growth is likely to be muted for short-duration products such as vehicle loans as collections continued to improve in Q3 FY22.
For vehicle financiers, or micro finance institutions, we estimate collection efficiency in the 95-100% range. Collection efficiency levels seem to suggest that asset quality even in the restructured portfolios (wherever repayments resumed) has held up well until Q3 FY22.
Most companies appeared to suggest that they might build up management overlay provisions in Q3 FY22 (in light of Omicron-driven third pandemic wave) and that the write-offs/ repossession losses were rather rangebound during the quarter.
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