The surplus provisioning buffer of ~1% of RWA built during FY21 is likely to ease incremental provisioning; however, lenders are likely to frontload credit costs during 1HFY22 on a prudent basis. Asset growth is likely to remain muted sequentially, marred by disrupted operations, resulting in lower fee income and disbursements on a sequential basis. Benefiting from a weak pandemic-hit base-year performance (during Q1FY21), we expect our coverage universe to clock an optically strong earnings growth of 38% YoY (-2% QoQ), despite the fact that the quarter was impacted by lockdowns and a devastating second wave. While banks and NBFCs navigated FY21 relatively unscathed on asset quality, we expect signs of weakness in the form of early-bucket delinquencies, accumulation of stressed asset pool due to muted economic activity, and a softer print on collections and recoveries during 1QFY22.