Nomura sees slowing growth for Indian NBFCs heading into FY25

Five-Star Business Finance

13/03/2024 05:10

** Nomura retains cautious stance on Indian non-bank
financial cos (NBFCs) going into FY25, citing growth moderation
due to headwinds including compliance-related regulatory actions
    ** Expects NBFCs to be forced to slow down loan growth in
medium term after RBI increases risk weight on unsecured loans
to limit rapid growth in the segment
    ** Adds in unsecured consumer durable and credit card loans
and in secured loans such as auto and home, NBFCs are losing
market share to banks due to increased competitive intensity 
    ** Expects asset quality to largely remain stable, barring
for firms who have grown aggressively in unsecured loans in last
1-2 years
    ** Nomura prefers Shriram Finance  SHMF.NS  and Five-Star
Business Finance  FIVS.NS  in the sector, while it remains
negative on SBI Cards and Payment Services  SBIC.NS  and
Mahindra and Mahindra Financial Services  MMFS.NS 
    ** As of YTD, SHMF up 15.6%, while MMFS, SBIC and FIVS down
between 1% and 13%
        

 (Reporting by Rama Venkat in Bengaluru)
 ((ramavenkat.raman@thomsonreuters.com; https://twitter.com/ramavenkat0607;))