NBFCs: Sector Headwinds Ease; Growth and Asset Quality Holding up Well

研报英文原文证据摘录

NBFCs: Sector Headwinds Ease; Growth and Asset Quality Holding up Well

India | Consumer Finance EquityJuneResearch22, 2026

NBFCs: Sector Headwinds Ease; Growth and

Asset Qualty Holding up Well

NBFC setup has improved as W. Asia tensions ease. Growth and collections

are tracking well ahead of last year. Softer bond yields & delayed rate-hike

expectations should support NIMs. We see healthy growth, easing credit

costs and range bound NIMs. Valuations have rebounded from post-conflict

lows but are near avg. Weak monsoon/El Nino is the key risk. Diversified

NBFCs are better placed near term. Prefer BAF, ABCAP, CIFC & SHFL.

Growth holding up well and concerns ease. Mar-Q results showed strong demand and asset

quality, and contrary to initial concerns, momentum in April-May has stayed healthy and well

ahead of last year despite West Asia tensions. Lower borrower leverage after the tightening of

the past few years, and better AQ in the new book, are giving lenders more comfort to grow in

segments such as unsecured PL, BL and MFI, which had slowed earlier. Sep-Q is seasonally

soft, but growth should pick up in 2H, with coverage loan growing at 18% over FY26-28e.

Funding cost concerns contained near term: AAA corporate bond yields are down c.60bps

from recent peaks post recent RBI measures, but still c.25bps higher YTD CY26. Higher spot

yields can lift incremental CoF, but mainly on fresh bond borrowings, which form c.26% of

NBFC ex-IFC liabilities by our est. For existing bank lines linked to EBLR/MCLR, rate hikes

matter more, and easing W.Asia tensions pushes out rate-hike concerns. We expect NIMs to

remain range-bound in FY27.

Asset quality resilient: April-May collection trends have been healthy and much better than