NBFCs Q3 Results Preview- Healthy Profitability Despite NIM Restraint From Rising Cost Of Funds: Motilal Oswal

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..Motilal Oswal Report.We expect ~8% YoY growth in assets under management for our coverage housing finance companies, including both affordable and other HFCs. Vehicle financers are projected to report ~26% YoY growth in AUM. Gold lenders (including non-gold products) are expected to report a ~25% YoY growth. NBFC micro finance institutions are forecasted to report a ~35% YoY growth, while diversified lenders are anticipated to deliver a ~24% YoY growth in AUM. For our coverage universe, we estimate a loan growth of ~20% YoY/~5% QoQ in Q3 FY24. Lenders acknowledged that they have started calibrating their growth in unsecured personal loans (particularly those sourced through digital partnerships)..Diversified lenders such as Bajaj Finance Ltd., Poonawalla Fincorp Ltd., L&T Finance Holdings Ltd., and non-vehicle segments of Shriram Finance Company Ltd. are likely to exhibit calibration in growth within unsecured personal loans. This has been more pronounced after the Reserve Bank of India increased the risk weights on unsecured consumer credit to 125% (from 100% earlier). For L&T Finance, we expect strong growth in retail loans, but since the wholesale segment (such as real estate and infrastructure) will continue to moderate, the consolidated loan book could grow ~3% QoQ in Q3 FY24. We estimate credit costs to moderate for L&T Finance, leading to a sequential improvement in profitability. We expect Bajaj Finance to report a ~34% YoY/7% QoQ growth in its assets under management. We estimate a ~20 basis points contraction in net interest margin for Bajaj Finance with credit costs increasing to ~1.7% (versus ~1.5% in Q2 FY24)  We expect Poonawalla to deliver ~60% YoY growth in standalone AUM, driven by ~10% QoQ growth in disbursements. We estimate this to translate into a ~13% QoQ growth in profit after tax for the company..Click on the attachment to read the full report:.Hotels Sector Q3 Results Preview - Stellar, Priced-In, FY25 Key: Dolat Capital.DISCLAIMERThis 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.

NBFCs Q3 Results Preview- Healthy Profitability Despite NIM Restraint From Rising Cost Of Funds: Motilal Oswal

Mortgages and gold loans yet to fully recover; minor improvement in asset quality

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NBFCs Q3 Results Preview- Healthy Profitability Despite NIM Restraint From Rising Cost Of Funds: Motilal Oswal

Mortgages and gold loans yet to fully recover; minor improvement in asset quality

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