Could Cost Of Funds Be The Dark Horse In The NBFC Sector? Motilal Oswal
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Motilal Oswal Report
Non-banking financial companies have seen significant volatility in CY20 on the borrowings front from a sharp increase in cost of funds in second quarter to multi-year lows by the end of CY20.
Given the abundant liquidity in the system and the Reserve Bank of India’s accommodative stance, incremental CoF across sources is likely to remain benign.
NBFCs with a niche presence and strong pricing power are likely to witness margin expansion.
Reduction in excess liquidity on the balance sheet and benefit of capital raise for a few players would also aid margins.
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