Banks share price target

In Feb’23, unsuccessful auto-debit requests (bounce rate) in terms of value on the NACH platform fell to a 48-month low of 21.5% and bounce rate in terms of volume on the same platform fell to a 46-month low of 28.3%.

Private insurers sold around 6.7 lakh policies in February 2023, while LIC sold 16.2 lakh schemes. The first-year premium of the industry fell 16.8% YoY to Rs 22,847.6 in the same period, with LIC's premium falling 32.1% to Rs 11,879.5 crore.

Surplus liquidity and subdued credit growth during the covid phase provided cushion to lenders (banks, SFBs) to calibrate deposit mobilisation and rationalise deposit rates as per their internal credit growth assumptions. However, with the regulator hiking repo rate to combat rising inflation and spur in credit demand since Mar’22, banks and SFBs have started reacting to rising policy rates.

In this compendium, we have put together Q3FY23, Q2FY23 and Q1FY23 earnings call takeaways for BFSI companies under our coverage (and also a few other key names in the sector).

The total value of credit card transactions rose 45.5% YoY and 8.3% MoM to Rs 1,28,067.9 crore in January. The number of cards outstanding increased by 17.4% YoY. Private sector banks grew 17.1% YoY in terms of value of transactions.

Banks’ sectoral deployment data for January 2023 suggests overall non-food credit now stands at Rs132.92trn, up 16.7% YoY/ 0.3% MoM/ 12.3% YTD with growth being led by retail.

The total value of credit card transactions rose to Rs 1,26,915.7 crore on an MoM and YoY basis. The number of cards outstanding increased by 17.7% YoY. Private sector banks grew by 37.9% YoY in terms of value of transactions.

We believe India Inc, after undergoing a phase of deleveraging over the past few years, is now better positioned to embark on releveraging. Recovery in economic activity, derivative effect of increased investments and spend on consumption may sustain >12% growth momentum over FY23-FY25E.