1QFY27F preview: Smooth sailing

Research evidence excerpt

1QFY27F preview: Smooth sailing

Global Markets Research

7 July 2026India NBFCs

EQUITY: FINANCIALS

1QFY27F preview: Smooth sailing Research Analysts

India Financials

We prefer BAF over CIFC as valuation gap has narrowed; commentary Shreya Shivani - NFASL

around cost of funds key monitorable shreya.shivani@nomura.com

+91 22 403 74804

Diversified lenders: Healthy AUM growth momentum and range-bound credit cost Ankit Bihani - NFASL

expected; margin pressure for most ankit.bihani@nomura.com

We expect all diversified lenders we cover except for HDB FS (HDBFS IN, Neutral) to +91 22 403 74135

report more than 20% y-y growth in AUMs in 1Q27F. For HDBFS, we expect a healthy Shreyas Pimple - NFASL

pickup in disbursement growth at 16% y-y in 1Q27F and loan growth to pick up from shreyas.pimple@nomura.com

2H27F. Overall, we believe management’s confidence that the company can disburse +91 22 403 74029

rapidly is in all likelihood supported by healthy asset quality trends. Thus, credit cost for

diversified lenders will be rangebound (Fig.2), in our view. The only drag in the quarter,

in our view, should be margin pressure on a q-q basis as the cost of funds from bank lines

remained elevated. Diversified lenders tend to have floating asset book to pass on some

pressure; still, we build in margin pressure for most (Fig.7).

Vehicle financiers: seasonally slower quarter and caution on vehicle segment;

SHFL immune to margin pressures

Seasonally 1Q expects deterioration in credit cost and asset quality trends for vehicle

financiers. Fuel price hikes and a fuel supply shock could have further created stress

here. This remains the key monitorable for vehicle financiers in 1Q27F. On the growth

front, we expect slower momentum for both MMFS (MMFS IN, Buy) and SHFL (SHFL IN,