Motilal Oswal - MOSL: FINANCIAL - NBFCS (GROUND REALITY)-On-the-ground demand strong; Average ticket sizes may see downward pressure

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Motilal Oswal

Alpesh Mehta

MOSL: FINANCIAL - NBFCS (GROUND REALITY)-On-the-ground demand strong; Average ticket sizes may see downward pressure

FINANCIAL - NBFCS (GROUND REALITY): On-the-ground demand strong; Average ticket sizes may see downward pressure

We recently visited several regional offices and branches of major vehicle financiers in and around Mumbai. Key takeaways:

The recent liquidity crunch has had a varying degree of impact on vehicle financiers' disbursements. One of the large financiers has partly curtailed disbursements, especially in the new-vehicle segment, while others have witnessed business-as-usual disbursements.
The HCV segment is witnessing more of bulk purchases. As a result, loan demand is migrating to banks rather than to NBFCs. In addition, lending rates in this segment are sub-10%, making it difficult for NBFCs to compete.
While it's early days, the impact of axle-loading norms seems to manifest in CV demand. Incrementally, demand is migrating to lower-tonnage vehicles, resulting in lower average ticket size on disbursements.
Early stage delinquencies are stable for all players due to high levels of truck utilization coupled with moderation in fuel prices over the past 1-2 months. Freight rates have been largely stable on most routes.

13/12/2018 8 EN

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Alpesh Mehta

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MOSL: FINANCIAL - NBFCS (GROUND REALITY)-On-the-ground demand strong; Average ticket sizes may see downward pressure

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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