NBFCs Q4 Earnings Preview - Recovery Gathers Momentum: Motilal Oswal
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Motilal Oswal Report
Macro recovery, coupled with a stable liquidity scenario, is leading to a strong recovery in growth and collection efficiency.
Across product segments, disbursements for Q4 FY21 are likely to be at pre-Covid-19 levels.
Across product segments, there continues to be a month-on-month improvement in collection efficiency.
Companies are also witnessing movement to the lower days past due segment from the higher DPD segment, leading to a lower provisioning requirement.
We continue to build in higher provision coverage ratio/write-offs to clean the books.
We expect credit cost to revert to normal levels over the next one to two quarters.
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