BFSI Q2 Results Preview - Modest Earnings Growth; Downside Risks To Credit Growth: Dolat Capital

Dolat Capital Report

Q2 FY25 earnings growth for banks to moderate to 4-5% YoY as margins and credit costs continue to normalise at lower/higher levels respectively. Some downside risks to growth are also building up, with slowdown in unsecured consumer credit and lack of credit demand from large corporates.

We build in net interest income growth of 1% QoQ and 8% YoY for coverage banks. Operating profit will be up 9% YoY, led by higher treasury gains. Slippages should be contained barring rise in delinquencies across unsecured retail (MFI/CC/PL), though moderating recoveries should lead to some normalization (rise) in credit costs YoY.

Return on assets to come off a high base, but remain at the upper end of long term averages, led by healthy net interest margins and benign credit costs. We factor in loan growth of 12.5% YoY and 3% QoQ for coverage banks.

Affordable housing financiers to report robust growth trends at 6% QoQ, along with steady asset quality.

Loan growth for gold loan NBFCs to remain upbeat at 5-7% QoQ along with sequential improvement in yields, benefitting from reduced competitive intensity, elevated gold prices, and slowdown in retail unsecured credit

Click on the attachment to read the full report:

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.