Housing finance majors likely to outperform in December quarter

Among others, vehicle financiers are expected to post sequential growth

The non-banking financial companies (NBFCs) sector is strongly linked to consumption, and expectations for the third quarter of financial year 2021-22 (Q3FY22) appear to be fairly optimistic. Despite the beginning of a third wave, disbursement momentum was strong.

There will be significant differences in growth rates across segments. In sequential terms, vehicle finance and housing mortgages, especially in the affordable segment, would have done well, given better Q3 sales. Collection efficiency has likely improved. New slippages should have declined.

But microfinance institutions (MFIs) are still weak, and credit costs for MFI lenders would remain high, given elevated write-offs. Wholesale lenders