Earnings preview: NBFCs to see modest growth in Q4, say analysts

It is likely that non -banking financial companies (NBFC) see a modest growth of a single digit for their net OC4Fy25 benefit, driven by stable margins and growth in assets under administration (AUM), analysts say. NBFCS’s comment on growth visibility, assets quality trends and the impact of potential fees on the margins will continue to be key monitoring in this quarter.

“We estimate the growth of 13 percent/15 percent year -on -year (interannual) in income from net interest and operational profits in the fourth quarter of 2015 for our NBFC coverage universe, it is expected that Althegh Pat is expected to remain flat.

Aum growth

The brokerage awaits a growth of 9 percent year -on -year in AUM for housing finance companies (HFC), including both affordable and large HFCs. It is projected that vehicle financials will inform 20 percent of growth AUM YOY, while it is likely that NBFC of gold loans register a 29 percent growth.

However, it is estimated that NBFC-MFI will publish a 15 percent yoy decrease in AUM, while diversified NBFCs are expected to generate a growth of 21 percent.

“For Our NBFC Coverage Universe, We Estimate Loan Growth of ~ 15 Per Cent Yoy and 4 Per Cent Qoq As of March 2025. Notwithstanding Seasonality, Demand Trends and loan Growth Remaled Flat Duration Growth In Calibrated, Mute Tail Tail Tail Tail Tail Tail To Calibrated, Tail Tail Tail Tail Tail Tail Tail To Calibrated, Tail To Calibrated Tail Tail Tail Tail Tail Tail To Calibrated, Tail To Calibrated, Tail Tail Tail Tail Tail Tail Tail Tail Tail To the calibrated tail, Qualibrated tail tail tail tail tail tail tail tail tail tail tail tail tail tail tail tail tail Motilal Oswal.

Active quality

Analysts say that the quality of NBFCS assets is likely to deteriorate in the fourth quarter, especially in MFI loans, given the broader stress, which is expected to reach the duration of the quarter.

According to the axis values, the greatest exposure to the Grameen loan of MFI credit in Karnataka is expected to contribute to greater stress due to the challenges in the efficiency of collection in the state.

“However, we hope that the states exclude Karnataka will work better. During the quarter, the landslides are expected to remain high, weighing the quality of the assets. Credit costs will also be maintained, although they can moderate on a QOQ basis. Management comments on growth revival and the signals of the quality of the quality of the assets will continue to be monitored.

Margins

Axis Securities said that the margins of net interest (NIM) are expected to remain stable for housing financatives, while showing a slight negative bias for diversified and gold financial. He expects a stable marginal improvement in NIM for vehicle financial.

Motilal Oswal said that the cost of loans for most NBFC has remained stable or has seen a lower decrease due to the reproduction of external loans linked to reference. However, the transmission through the marginal cost of loans from the funds based on funds (MCLR) has not yet occurred, and most NBFC believe that it will take place with a delay or 3-6 months.

“4q NIM for NBFCS would exhibit stability or lower compression, mainly due to some pressure on yields. We hope that the NIM will remain stable or see a minor improvement for fixed rate lenders, such as the months of vehicle repair rate,” he said.

Brokerage House Nuvama said that Shriram Finance, Can Finn Homes, Five Star Finance and Mushot to report strong profits. “For CIFC (Chola), a decrease of more than 15 percent of QOQ in the cost of credit will be seen negatively. MMFS (M&M Finance) is expected to register a weak update. It is expected that LTFH (L&T Finance) reports an QOQ profit gain with,” he said.

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Posted on April 13, 2025