Financial Services Sector — Q2 FY24 Earnings Overview

Management flagged that customers with multiple small-ticket loans (<₹50,000) show higher imprudence and default rates, prompting portfolio cuts of 8-14%.

NIM declined sequentially due to lagged impact of term deposit rate increases; further moderation expected in coming quarters.

Analysts raised concerns about rising delinquencies in small-ticket unsecured loans; management downplayed risk for ICICI due to focus on upper segments.

Management acknowledged intense competition across mortgages, personal loans, and corporate lending, which could pressure yields.

Cost of funds is expected to rise as low-cost borrowings mature and are replaced at higher rates, compressing NIM by 25-30 bps for the full year.