Other Financial Services share price target

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.

Cash ADTV dipped 2% MoM, while NSE derivatives volumes continued to grow at a rapid pace of 13% MoM in Mar’23. Interestingly, despite an increase in trading costs in the form of increased STT (partially offset by rollback of increase in transaction cost by NSE), total NSE futures/options ADTV has remained range bound between Rs225- Rs235trn between Mar-Apr’23.