The funding squeeze for the NBFC sector will continue to drive divergence. A washout quarter for auto OEMs will add to AFCs' growth woes. The recurring theme of NBFCs with superior parentage and better asset quality gaining market share will continue to play out. An uptick in securitisation/ assignment is expected for players for whom funding has been constrained. The growth prospects for HFCs in our coverage remain unchanged. 1QFY20 was marked by a slew of defaults (smaller), as aftershocks from the Sept-18 episode continued. Resulting delinquencies could manifest in 2Q. We expect our coverage cos to be relatively insulated. Credit growth and mkt share gains for PVT Banks are expected to sustain. Challenges on the deposit growth front for the system persist, hence C/D ratios are expected to rise (partly seasonal). Credit costs are expected to moderate for corp heavy banks (ICICIBC, AXSB and SBIN) even as coverage continues to build up. PSBs stand to gain from the fall in benchmark yields.