NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
Loan growth for our coverage banks stood healthy at 21.3% YoY/1.4% QoQ (including HDFC and AU Small Finance Bank merger impact) on the back of continued strong growth in retail and SME segments. Some of the key trends observed as per management commentaries included:
-
Slowing growth in microfinance, vehicle finance and unsecured personal loan segments due to stress build-up,
-
Moderation in credit growth in large corporate segment as some banks preferred to stay away from the rate competition and
-
Ample liquidity with public sector banks can support their loan growth and margins going ahead.
On the other hand, private banks, which have normalized liquidity coverage ratios of 110-120% and high LDRs, are depending on branch/digital expansion to garner deposits.
Specialized NBFCs:
In our gold loan NBFC coverage, main highlight was improvement in Gold Loan AUM and gold tonnage/client growth on a QoQ basis. As mentioned in our gold finance sector report dated January 16, 2024, which was based on channel checks in Kerala and interactions with managements/industry laterals, we prefer Muthoot Finance first in this space due to its strong customer retention and acquisition initiatives, entry into new segments and growth based on internal accruals. In the Infrastructure Finance segment, HUDCO reported strong loan growth of 30% YoY and its credit costs remained negative.
However, net interest margin declined to 3% due to disbursements in Q1 FY25 being back-ended, the full impact of which will be felt on revenue in Q2 FY25. We are positive on HUDCO due to its niche position in Social Housing and Urban Infra Financing, its ability to grow faster (due to its robust capital position), improving margins and low risk on the balance sheet with higher government exposure.
Click on the attachment to read the full report:
NBFC Q1 Review- Seasonality, Election, Heatwave Impacted Business, Asset Quality; Outlook Positive: Systematix
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
. Read more on Research Reports by NDTV Profit.