India's NBFCs/SFBs to see strong quarter -Investec

Equitas Small Finance Bank

06/01/2023 07:12

** Indian non-banking financial companies (NBFCs) and small
finance banks (SFBs) will see a strong Dec-qtr on loan growth,
asset quality growth and profitability, says Investec
    ** "Our channel checks suggest strong demand trends across
segments, to lead to strong AUM growth, say Investec analysts
    ** Sees "possibility of positive surprises" from Equitas
 EQUI.NS , Ujjivan  UJJI.NS , Home First  HOME.NS  and LIC
Housing Finance  LICH.NS ; recommends "buy into the results"
    ** Says improved asset quality, strong collection trends,
and Q/Q drop in credit costs to ease pressures on net interest
margins
    ** Says vehicle financiers to be most vulnerable to rising
interest rates given their fixed rate asset book, while SBFs
will see lesser impact than NBFCs due to retail deposits
    ** Expects gold NBFCs to have a weak qtr on competitive
pressures and late surge in gold prices; is cautious on Muthoot
Finance  MUTT.NS  and Manappuram Finance  MNFL.NS  as they might
disappoint on loan growth
    ** Investec flags impact of inflation, rising attrition
rates, and impact of rising cost of funds and margins as key
monitorables for the quarter
 (Reporting by Biplob Kumar Das in Bengaluru)
 ((Biplobkumar.das@thomsonreuters.com))