BFSI Q3 Earnings Preview - Optimistic Yet Watchful, Says Axis Securities
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Axis Securities Report
The key highlight for Q3 FY21 will be the asset quality outlook as it is the first quarter post lifting of the moratorium. We remain watchful of asset quality and commentary on slippages and restructuring will be keenly eyed.
Large banks and select mid-tier banks look comparatively better positioned on higher provisioning and adequate capital adequacy ratio.
Most non-banking financial companies have focused on improving collection efficiency. While the ratios are not comparable across the sector, overall trends seem to be positive.
The pent-up demand post a subdued H1 FY21 coupled with festive season will result in higher disbursements QoQ; however, small finance banks will continue to exercise caution while disbursing.
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