New Delhi, Feb 9 (FN Bureau) Housing Finance Companies (HFCs) will witness better growth prospects and revival in profitability in the financial year 2023, rating agency ICRA said on Wednesday. The HFC portfolio growth is estimated at 8-10 per cent for FY 2022 and at 9-11 per cent for FY 2023, the ratings agency said, and increased its estimate of reported GNPAs to 3.6-3.8 per cent as on March 31, 2022 before recovering to 3.2-3.5 per cent by March 31, 2023 Asset quality pressures are likely to keep credit costs high and profitability moderate in FY 2022, similar to FY 2021 but expected to revive to near pre-Covid levels in FY 2023, it said.
The on-book portfolio of non-banking financial companies-housing finance companies (NBFC-HFC) in India is estimated at Rs 11.6 lakh crore as on September 30, 2021, registering a Y-o-Y growth of 9 per cent (7 per cent adjusted). ”Going forward, the growth trend is expected to be driven by healthy demand in the industry, increasing level of economic activity and increasing vaccination. There will, however, be a downside risk in case of significant disruptions caused by the new wave of infections in Q4 FY 2022 or future (Covid) waves if any.
“Further, the measures taken by the regulator to strengthen the structural, regulatory and supervisory framework for the NBFCs, especially the tighter non-performing advances (NPA) and recognition/upgradation norms, could lead to increased focus on internal controls, which can, in turn can also impact sectoral growth,” it said. Sachin Sachdeva, Vice President and Sector Head, Financial Sector Ratings, ICRA, said: “Because of the disruptions induced by the second wave of the pandemic, the housing portfolio did not witness sequential growth in Q1 FY2022, though the Y-o-Y growth was better than FY2021 given the low growth in Q1 FY2021. Disbursements picked up pace in Q2 FY2022 and the portfolio registered both Q-o-Q and Y-o-Y growth.”