Share India Securities · risk themes across the available quarters.
Bear-case history
Net interest margins have declined over recent years as the company shifted from unsecured to secured lending (40% of book). Management expects further NIM compression before stabilization as the secured portfolio scales.
MTF-related NPAs increased in Q3 compared to Q2 due to conservative provisioning and defaults from the downsizing unsecured book. Management expects NPS to decline as the secured book grows.
Branch network and client base have declined as the company reduced exposure to tier-2/3 towns in the unsecured NBFC segment. This constrains reach for future growth.
Merchant banking revenues remain lumpy. With 6 approvals in hand, management is waiting for market stabilization before launching SM segment deals. Mainboard IPO filed in January yet to receive approval, creating revenue uncertainty.