NBFC Q3 Results Preview - Strong Growth Continues; Margins Tad Lower: Systematix

Systematix Research Report

Non banking financial companies within our coverage universe are likely to report another strong quarter with assets under management growth of ~27% YoY/ 5.5% QoQ.

Loan demand remains strong across product categories like vehicle, housing, small and medium enterprise/consumer segments (excluding- gold loan and unsecured loans). While most NBFCs will see their net interest margins contract by 5-25 basis points (given increase in cost of funds), few of them likely to maintain or see marginal increase in their NIMs, aided by change in their portfolio mix and upward revision in lending rates.

Asset quality remains stable, as NBFCs continue to experience healthy collection efficiencies during the quarter.

Home First Finance Company Ltd. ('Buy'), and Shriram Finance Company Ltd. 'Buy') are our top picks within our universe.

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