With a pause in rate hikes, NBFCs, like banks, are in a sweet spot

Alongside banks, non-banking finance companies (NBFCs) have also done well on the back of an economic revival in the second half of the 2022-23 financial year (H2FY23).

The Reserve Bank of India’s (RBI’s) pause in interest rate hikes and a continuation of the revival of private consumption would boost NBFCs in the first quarter (Q1) FY24. 

Analysts believe that double digit growth -- in the 15-20 per cent range -- is likely in net interest income (NII), pre-provision operating profit (PPOP) and profit after tax (PAT) in Q1FY24. Business volumes should be driven by healthy demand for vehicle finance, mortgages,