Auto NBFCs Q4 Earnings Review - Growth Decelerates, Stress Pool Remains Elevated: Nirmal Bang

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Nirmal Bang Report

In Q4 FY21, we witnessed a wide disparity in growth, asset quality and valuations of auto non banking financial companies.

However, capital raise in the last one year, abundant liquidity and adequate provision buffers aided in strengthening the balance sheets.

Benefit from low cost of funds continued to accrue, but the net interest margins were lower QoQ due to interest reversals.

Shriram Transport Finance Company Ltd. was a clear outperformer due to an improvement in its end market demand, stable asset quality and high provision buffer compared to stress on its balance sheet.

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