Financial Services Q3 Preview - Uncertainties Cloud Earnings: Prabhudas Lilladher
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Prabhudas Lilladher Report
In light of pandemic challenges coupled with tightening regulatory standards on asset quality and business scalability, non banking financial companies’ earnings (aggregate flat QoQ) are expected to remain under pressure for current fiscal.
While growth is back in reckoning and FY22 assets under management traction to exceed FY21 levels as collections stand healthy, the same would come at cost of margins.
As funding costs benefits begin to recede and need to maintain lucrative yields owing to competition intensities, net interest margin pressures stand imminent.
However, bigger devil lies in the details of asset quality reportage of NBFCs in light of-
new Reserve Bank of India norms of daily non performing asset stamping and recognition and
upgradation of stage-III/gross non performing asset assets only after full customer repayments.
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