Financial Services – Jul-Sep’25 Earnings Preview – Slowdown persists; NIM improvement visible
Published on 07 Oct 2025
Slowdown in industrial production, weak capacity utilisation and disruption due to excess rain is likely to hamper growth for auto financiers in Q2. However, with the festive season kicking in, we expect an uptick in volumes in H2 due to the relief from GST cuts. Incremental CoF has already started to taper off and we expect the movement to continue in Q2. Prefer diversified auto-financiers (CIFC and SHFL). BAF reported an AUM growth of 24% YoY- commentary around NIM improvement and pick-up in growth in H2 could be key positives. We remain wary of asset quality trends for MMFS/ SHFL.
