1QFY27: Growth momentum continues as margins and AQ hold; MW on fair value

Research evidence excerpt

1QFY27: Growth momentum continues as margins and AQ hold; MW on fair value

years, please see report: 4QFY26

Deep dive - Strong growth across most NBFCs; near-term risks, select OWs. Ask

YTW G-spd

Potential equity raise to support FY28 target Bond Ask Px (%) (bps) TATSON 5.389 28 100.5 5.2 98

Management reiterated confidence in its FY28 guidance (AUM > INR1.5trn, RoAUM > SHFLIN 6.625 27 101.4 4.8 83

3%, 1QFY27 RoAUM: 1.9% for growth-business). To this effect, the board has approved SHFLIN 6.15 28 101.6 5.1 97

INR40bn of capital raise through equity/equity-like instruments. Additionally, MUTHIN 7.125 28 101.0 6.1 212

management expects operating leverage, lower opex intensity and financial leverage to MUTHIN 6.375 29 100.0 6.3 217

MUTHIN 6.375 30 99.8 6.5 222

support profitability expansion. The retail opex/AUM has been declining consistently, and MUTHIN 5.75 30 97.9 6.4 220

management sees scope for a further 40bps-50bps reduction in the next few quarters. PIFINL 7.8 28 101.7 6.5 244

At the same time, while AUM/equity improved to 3.7x, management targets 4.5x-5.0x MGFLIN 7.375 28 100.8 6.7 265

leverage over time. However, the impact of the Middle East conflict and job losses in IIFOIN 8.75 28 103.0 7.1 299

India’ IT industry amid AI adoption globally on AQ are watch points. IIFOIN 7.6 29 100.3 7.5 325

IIFOIN 7.6 30 99.3 7.8 357

PIFINL has seen a series of rating upgrades this year led by stabilizing profitability - IHFLIN 9.7 27 102.7 6.7 276

S&P’s upgrade to BB/Stable from BB- while Moody’s revised outlook on its Ba3 rating to IHFLIN 8.95 28 103.9 6.9 278 IHFLIN 7.5 30 100.9 7.2 300

positive and domestic rating agencies’ (ICRA and CareEdge) upgrade to AA+ from AA Source: BofA Global Research, Bloomberg (17th Jul

while Crisil assigned AA+/Stable rating.