Other Financial Services share price target

Average daily traded value (ADTV) of NSE equity options continues to scale new highs over past eight months. This is despite lower demat account addition, lower NSE-active client number as well as lower cash volumes – and also despite increase in transaction cost by ~25% in securities transaction tax (STT) on derivative segments.

The Securities and Exchange Board of India (SEBI) has released a consultation paper on the review of total expense ratio charged by the asset management companies (AMCs) to unitholders of schemes of mutual funds to facilitate greater transparency and accrual of benefits of economies of scale to investors.

Key trends in the asset management space in FY23 include: (1) continued pressure on yields, (2) increasing expense ratio (total opex / AAUM), and (3) outflows in debt AUM (FY22/FY23 industry outflow was at Rs1.8trn/1.4trn).

Housing finance sector is well poised to deliver 14% CAGR over medium term, in our view, on the back of increasing urbanisation, nuclearisation of households and rapidly growing rural penetration. Low-ticket HLs (Rs0.2mn-Rs1mn) reported strong 44% YoY disbursement growth in FY22.

In a decade-long eventful journey, microfinance lenders are very close to an end of the longest asset quality cycle (FY17-22) – starting from demonetisation in FY17, floods, NBFC crisis in FY18-19, and lastly covid in FY21-22.