INSTITUTIONAL EQUITY RESEARCH

Financial Landscape
Luxury housing continues to thrive
INDIA | BFSI WEEKLY | SECTOR UPDATE 13 March 2024

Please find the BFSI weekly “Financial Landscape” covering key important data; news flow;
management /regulatory comments; management changes; channel checks and key trend in Manish Agarwalla, Research Analyst
high frequency data. [email protected]

Key highlights of the edition: Shubhranshu Mishra, Research Analyst

[email protected]
Key take away from call with Mr. Pankaj Kapoor, Founder & MD of Liases Foras
We hosted a call with MD of Liases Foras for his views on recent real estate cycle and demand Dhruti Parekh, Research Associate
[email protected]
cycle by metro and tier1. The luxury housing segment in Tier 1 cities is thriving an impressive
45% growth rate indicating of escalation demand for upscale properties in urban centers. The
affordable housing segment has witnessed negative growth with a shift in market dynamics
or challenges within this sector. Over the past two years, the demand for housing in Indian
cities has surged considerably resulting in a substantial 20% increase in home prices. Notably,
Bengaluru, Delhi NCR, and Kolkata have witnessed remarkable increases, with average
housing prices soaring by up to 30% in 2023 compared to 2021. This surge reflects the strong
demand dynamics and possibly limited supply, leading to substantial price appreciation in
these urban centers.

IIFL management on RBI action pertaining to gold loan business

As per the management LTV breaches identified when own audit team did purity checks
before auctioning. Most gold loan co-lending partners make own assessments for gold
collateral. IIFL finance was doing cash disbursement of Rs 200,000 per account per day vs.
income tax act of Rs 20,000. The regulator wants IIFL Finance to comply with its interpretation
of income tax act. The company was doing e-auctions on tiger auction platform; however, RBI
has guided for taluka/branch level auctions. The company was charging auction charges for
legal and courier costs and levied on customers. There’s adequate liquidity at group level, till
issue is resolved. Collections will happen over loan maturity, leading to better liquidity through
next 6-months as run-down of loans takes 7-8 months. The management is resolved to comply
with regulations and will emerge stronger from this crisis. The company is taking steps to
resolve the issue; however, RBI directive seems to be harsh. 21-09-23 FY23 audit started,
barely a month after FY22 audit was over. The regulator comments came in Jan-24. All
notifications came in last 45 days.

Banks: Credit growth should start converging towards deposit growth for the industry. Private
banks, which are running high LDR is expected to see moderation in loan growth compared to
public banks. The ability to manage NIM, favorable bond yield and low credit cost are few
drivers, which keep sentiment positive for Public bank. Within Private space, ICICI is expected
to outpace industry credit growth and hence remains our preferred pick. IndusInd one of the
key beneficiaries of rate reversal, hence we are constructive. HDFC bank valuation today
factors the moderate loan growth. We believe the earnings growth has potential to outpace
loan growth, hence remain positive on HDFC Bank as well.

NBFC: Loan growth for BAF, SHFL, CIFC and MMFS remained 25%+. The disbursement of asset
financiers like CIFC and MMFS have guided for softer disbursements in FY25 vs. FY24 led by
slower PV and tractor sales. Loan growth for BAF and SHFL should be stellar at 25%+ in FY25
as well. Risk-weight increase on unsecured lending impacted BAF the most with c.300bps of
tier 1 getting shaved off. All NBFCs reported so far strong provision cover and expect credit
cost normalization in FY25. We can expect stable spreads for our covered NBFCs in FY25. Our
tip picks: BAF, SHFL, MUTH.

Page | 1 | PHILLIPCAPITAL INDIA RESEARCH

Please see penultimate page for additional important disclosures. PhillipCapital (India) Private Limited. (“PHILLIPCAP”) is a foreign broker-dealer unregistered in the USA. PHILLIPCAP research
is prepared by research analysts who are not registered in the USA. PHILLIPCAP research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt
Securities Inc, an SEC registered and FINRA-member broker-dealer. Powered by EQUITEC
 BFSI WEEKLY SECTOR UPDATE

Channel check / key reports published

Key take away from call with Mr. Pankaj Kapoor, Founder & MD of Liases Foras

The recent trends indicate a promising trajectory marked by several developments. Despite high supply, the market is
showing signs of balance with sales steadily growing at a harmonious equilibrium between demand and availability.
City wise analyses reveal varied growth patterns: the Mumbai Metropolitan Region (MMR) emerges as a first in
expansion closely followed by Pune. Delhi-NCR has experienced a reduction in supply potentially signaling a phase of
correction. Chennai lags behind in returning to its previous vigor suggesting challenges.

The luxury housing segment in Tier 1 cities is thriving an impressive 45% growth rate indicating of escalation demand
for upscale properties in urban centers. The affordable housing segment has witnessed negative growth with a shift in
market dynamics or challenges within this sector.

The growth momentum has been observed since the fiscal year 2021 underlining a recent upturn in the market. Price
trends vary across regions with Delhi-NCR undergoing a correction phase resulting in the highest average growth in
prices. The presence of super large developers underscores their influential role shaping market dynamics and exerting
a significant impact on supply, pricing, and overall sentiment.

Over the past two years, the demand for housing in Indian cities has surged considerably resulting in a substantial 20%
increase in home prices. This notable upward trajectory can be attributed to several factors contributing to a conducive
market environment. Favorable interest rate cycles have played a significant role by making home loans more
affordable, thereby stimulating demand among prospective homebuyers. Additionally, a positive economic outlook
characterized by stable GDP growth, rising incomes, and improving job prospects has bolstered consumer confidence,
further driving the demand for residential properties. Moreover, there has been a growing sense of assurance among
homebuyers regarding the long-term value of real estate investments contributing to the buoyancy in the housing
market.

The housing index tracker, specific cities have experienced an unprecedented surge in average housing prices,
underscoring the robustness of the market. Notably, Bengaluru, Delhi NCR, and Kolkata have witnessed remarkable
increases, with average housing prices soaring by up to 30% in 2023 compared to 2021. This surge reflects the strong
demand dynamics and possibly limited supply, leading to substantial price appreciation in these urban centers.

Sales has been growing both in volumes… …and value

Sales (units) YoY (RHS, %) Sales (Rs tn) YoY (RHS, %)
35
600000 40 6 50 60
44
30 50
500000 19 5 34
17 40
11 20
8 7 4 30
400000 6 5 3 14
10 13 20
8 6
-30 3 3 1 10
300000 0
-30 0
-10 2
200000 -10
2,79,217

3,00,783

3,18,126

3,34,998

3,57,150

3,94,712

4,06,938

2,86,143

3,86,218

4,57,674

5,34,285

-20 -20
100000 1
1.7

1.9

2.1

2.2

2.4

2.5

2.6

2.6

3.5

5.2

-30 -30
2020 1.8

0 -40 0 -40
2013

2014

2015

2016

2017

2018

2019

2021

2022

2023
2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Source: PhillipCapital India Research, Liases Foras

Source: PhillipCapital India Research, Liases Foras

Page | 2 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

IIFL Management on RBI action pertaining to gold loan business

Management comments: The management said the LTV breaches identified when own audit team did purity checks
before auctioning. Most gold loan co-lending partners make own assessments for gold collateral. IIFL finance was doing
cash disbursement of Rs 200,000 per account per day vs. income tax act of Rs 20,000. The regulator wants IIFL Finance
to comply with its interpretation of income tax act. The company was doing e-auctions on tiger auction platform;
however, RBI has guided for taluka/branch level auctions. The company was charging auction charges for legal and
courier costs and levied on customers. There’s adequate liquidity at group level, till issue is resolved. Collections will
happen over loan maturity, leading to better liquidity through next 6-months as run-down of loans takes 7-8 months.
The management is resolved to comply with regulations and will emerge stronger from this crisis. The company is taking
steps to resolve the issue; however, RBI directive seems to be harsh. 21-09-23 FY23 audit started, barely a month after
FY22 audit was over. The regulator comments came in Jan-24. All notifications came in last 45 days.

The response from management: The management has approached RBI for special audit and it is likely to happen soon.
The company will apply for fast resolution of this issue. The company received 35 complaints from RBI on gold loans in
FY23, out of 1.8mn+ gold loans disbursed in FY23. The assignment transaction is done in 10:90 proportion, of which 90%
goes to banks. The company has 6-7 banks as co-lending partners for gold loans. The company carries a liquidity of Rs
40bn at group level. It will continue to collect through loan tenor. Deviations in auction happens in net weight of gold
collateral in disbursement vs. at auctions. Deviations were in 25 cases.

Though no commitment on timeline for resolution, no material impact on profit in next 6-months: Rs 650-700mn
needed as fixed monthly opex for gold loan branches. Disbursements have stopped from today, as per RBI notification.
RBI inspection report response was to be submitted by 11-3-24, however RBI was proactive in coming up with this
notification. The management will make processes tighter at branches and will do intensive training for branch staff.
RBI inspection is done for entire company for FY23. Financial implication on company will depend on how long this
situation lasts. There has been no specific observation on Anti-money laundering (AML)/Know-your-customer (KYC). RBI
allows recovery/collections of gold loans contracted by company with borrowers through loan maturity. The company
did not commit to any timeline for resolution. Most gold loans originated are term loans not bullet loans and only term
loans are assigned. The management does not foresee any material profit impact for next 6 months, as marketing costs
and acquisition costs for gold loans will be discontinued. The interest income will keep coming till portfolio runs down,
which has a contracted maturity of 7-8 months.

Page | 3 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

News flows

RBI, Bank of Indonesia sign MoU to promote use of local currencies in bilateral transactions
https://tinyurl.com/3p9x8j5s
The Reserve Bank of India (RBI) and the Bank of Indonesia on Thursday signed a Memorandum of Understanding for
establishing a framework to promote the use of local currencies viz, the Indian Rupee (INR) and the Indonesian Rupiah
(IDR) for cross-border transactions. The MoU was signed by the Governor of Reserve Bank of India, Shaktikanta Das and
the Governor of Bank of Indonesia, Perry Warjiyo.

RBI’s directive on credit cards: Experts say will promote fair and inclusive financial system, foster healthy competition
https://tinyurl.com/w9sbn832
Reserve Bank of India’s directive that said issuers of credit cards shall not enter into any arrangement or agreement
with card networks that restrain customers from availing the services of other networks. The directive means customers
will now be able to choose from card networks such as Visa, Mastercard and others at the time of issuance.

Narrative that RBI is killing fintech sector not true: Das

https://tinyurl.com/3s8jnncw
Reserve Bank of India (RBI) governor Shaktikanta Das on Wednesday strongly defended the action against Paytm
Payments Bank. Das said he failed to understand the narrative that the banking regulator was killing the fintech sector
when the restrictions were essentially against the business operations of a bank.

Deposit-taking NBFCs shrink on RBI strictures

https://tinyurl.com/2p8sux84
The increasing regulatory scrutiny on deposit-taking entities of non-banking financial companies, and the RBI (Reserve
Bank of India) reluctance in handing out fresh deposit permits has compelled shadow banks to look for alternate sources
of funding.

IIFL Finance to receive $200 million liquidity support from Fairfax after RBI ban
https://tinyurl.com/yspaejm9
India’s IIFL Finance said on Wednesday that top shareholder Fairfax India has agreed to provide up to $200
million in liquidity support to the company, days after the country’s central bank barred the firm from
disbursing gold loans, raising liquidity concerns among investors and lenders.

Aim 2-2.5% RoA by FY25: M&M Finance MD

https://tinyurl.com/4t67dvuc
NBFC major Mahindra & Mahindra Financial Services (M&M Finance) will likely achieve key targets on most business
parameters set under the Vision 2025 goals, but attaining 2.5% return on asset (RoA) could be a challenge, MD and vice
chairman Ramesh Iyer tells Piyush Shukla in an interaction.

RBI approves Fincare SFB merger with AU SFB

https://tinyurl.com/y46ppp9k
The Reserve Bank of India (RBI) on Monday approved the proposed merger of Fincare Small Finance Bank (SFB) with AU
SFB, with the effective date of the merger being set as April 1.All the branches of Fincare Small Finance Bank will function
as branches of AU Small Finance Bank with effect from April 1, 2024.

IRDAI retains obligatory cession of business to GIC Re at 4% for FY25

https://tinyurl.com/mufsaknd
The Insurance Regulatory and Development Authority (IRDAI) on Friday announced that it has maintained the status
quo on obligatory cession of business for the financial year 2024-25 at 4 per cent in favour of General Insurance
Corporation of India (GIC Re), except for terrorism and nuclear pool related premium.

Page | 4 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

Key indicators
Credit, Credit substitutes and Deposits
Fortnightly Credit and deposit data (fortnightly)
Credit Growth yoy Deposit Growth yoy CD ratio, rhs
20% 80%
18% 78%
16% Fortnightly credit growth period ending
76%
14% 23rd February (excluding merger impact
12% 74%
of HDFC Ltd) was at 0.5% fof & 16.5%
10% 72% yoy whereas for deposit, growth was -
8% 70% 0.1% fof & 12.5% yoy. CD ratio at 78%.
6%
68%
4%
2% 66%
0% 64%
Aug 23, 2018
May 23, 2018

May 23, 2019

May 23, 2020

May 23, 2021

May 23, 2022

May 23, 2023

Aug 23, 2019

Aug 23, 2020

Aug 23, 2021

Aug 23, 2022

Aug 23, 2023

Feb 23, 2018

Nov 23, 2018

Feb 23, 2019

Nov 23, 2019

Feb 23, 2020

Nov 23, 2020

Feb 23, 2021

Nov 23, 2021

Feb 23, 2022

Nov 23, 2022

Feb 23, 2023

Nov 23, 2023

Feb 23, 2024
Source: PhillipCapital India Research

Credit and substitute growth (fortnightly)

Rising bond yield has shifted demand
Corporate bond (yoy) Credit (yoy)
for credit back to banking system. The
Securitised loan (yoy) Credit and Credit substitute (yoy)
50% credit growth was higher than growth
in credit & credit substitute. Owing to
40%
tight liquidity, securitization has seen
30% strong growth in December 2023.

20%

10%

0%

-10%
Dec-15
Apr-16

Dec-16
Apr-17

Dec-17
Apr-18

Dec-18
Apr-19

Dec-19
Apr-20

Dec-20
Apr-21

Dec-21
Apr-22

Dec-22
Apr-23

Dec-23
Aug-16

Aug-17

Aug-18

Aug-19

Aug-20

Aug-21

Aug-22

Aug-23

Source: PhillipCapital India Research

Sectoral credit growth (monthly)

Agriculture Industry Retail Services
40
35 Credit growth continues to be
30 driven by Retail and Services
25 sector. As per January’ 24
sectoral data Retail (incl. eHDFC
20
ltd) grew 28.8%; Services 23.9%;
15
Agri 20.1% and Industries 8.3%
10
5
0
-5
-10
Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22

Jul-23
Oct-19

Oct-20

Oct-21
Jan-17
Apr-17

Oct-17

Oct-18
Jan-18
Apr-18

Jan-19
Apr-19

Jan-20
Apr-20

Jan-21
Apr-21

Jan-22
Apr-22

Oct-22

Oct-23
Jan-23
Apr-23

Jan-24

Page | 5 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

Source: PhillipCapital India Research

Yield movement

Gsec yield curve, % (weekly) (%) Corp bond yield curve (weekly) (%)

10 08-03-2024 01-04-2022
09-03-2024 02-04-2022 10
02-04-2021 03-04-2020
03-04-2021 04-04-2020
8 8

6 6

4
4

2
2 Corp bond Corp bond Corp bond Corp bond Corp bond
G-Sec 1yr G-Sec 2yr G-Sec 3yr G-Sec 4yr G-Sec 5yr G-Sec 10yr 1yr 2yr 3yr 4yr 5yr

Source: PhillipCapital India Research Source: PhillipCapital India Research

Guidance on fiscal consolidation during the budget led to some respite in bond yield. However tight liquidity led to some rise in
bond yield. The corporate bond yield curve is inverted indicating tight liquidity.

Credit spread monthly

Credit spread (MCLR-1yr corp bond), RHS 1 yr corp Bond rate 1 yr MCLR
10 3.5

9
3.0
8
2.5
7
2.0
6

5 1.5

4
1.0
3
0.5
2
-
1

0 -0.5
February-17 February-18 February-19 February-20 February-21 February-22 February-23 February-24
Source: PhillipCapital India Research

The rising short term corporate bond yield has reduced the credit spread (1yr MCLR – 1 yr Corporate bond yield), thus increasing
the attractiveness for bank loan. We expect some credit substitutes to flow back to bank credit given the rise in high corporate
bond rates

Page | 6 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

MCLR 1 yr – key bank wise (monthly)

SBI Axis Bank Ltd. HDFCB
11% ICICIBC IIB KMB
In the month of February 2024,
10% Axis Bank, Indian Bank and IIB
increased 1yr MCLR by 5bps. HDFC
9% Bank, ICICI Bank, Kotak Bank and
Federal bank has increased MCLR
8% by 10bps. SBI and BOB kept their
MCLR unchanged
7%

6%

Source: PhillipCapital India Research

Real Interest rate

Real Interest, LHS Repo rate CPI
6% 9%
5% 8%
4%
7%
3%
6%
2%
1% 5%
0% 4%
-1%
3%
-2%
2%
-3%
-4% 1%
-5% 0%
Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Feb-24
Source: PhillipCapital India Research

CPI for February at 5.09% (Jan 5.10%), keeping real interest rate positive.

Private Bank PSB

Cost of TD Incremental Cost of TD 8 Cost of TD Incremental Cost of TD
8
7
7
6
6
5
5

4 4

3 3

2 2

Source: PhillipCapital India Research Source: PhillipCapital India Research

The lending rate on fresh sanction for PSBs have seen increase of 3bps in January. The average lending on fresh sanction by
private continues to increase in January by 1bps.

Page | 7 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

Corporate Asset Quality

Corporate Debt Rating (Upgrade vs Downgrade) Rs bn Corporate Debt Rating-Number of Upgrade vs Downgrade

8000 Upgrade Downgrade 700 Upgrade Downgrade

7000 600
6000 500
5000
400
4000
300
3000
200
2000

1000 100

0 0
Mar-19

Mar-20
Jul-16
Nov-16
Mar-17
Jul-17
Nov-17
Mar-18
Jul-18
Nov-18

Jul-19
Nov-19

Jul-20
Nov-20
Mar-21
Jul-21
Nov-21
Mar-22
Jul-22
Nov-22
Mar-23
Jul-23

Jul-16
Oct-16

Oct-17
Jan-17
Apr-17
Jul-17
Jan-18
Apr-18
Jul-18
Oct-18

Oct-19
Jan-19
Apr-19
Jul-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Source: PhillipCapital India Research Source: PhillipCapital India Research

Retail Consumption

Spends market share for most players has remained similar …driven by similar yoy growth
in FY24 YTD…
HDFCB SBI Cards ICICIBC AXSB CitiBank HDFCB SBI Cards ICICIBC
KMBB RBL IIB Amex Others
AXSB CitiBank KMBB
100% 6 6 6 7 RBL IIB Amex
9 8 8 4 8 9 9 9 9 10 10 9 10 10 10
10 9
24 4 3
5 3 3 3 3 3 3 3 2 3 3 2
12 12 11 4 5 4 5 5 5 5 5 5 5 4 5 5 5
80% 2 3 3
1 3 3 3 4 4 4 4 4 4 4 4
4 4 4 4 200
2
0
2 0
2 1 2 3 5 3 4 4 4 4 4 4 4
2
11 96 6 9
3
12 12
4
12
4
16 15 13 3
3 8 9 12 12 12 11 12 12 12 150
60% 10 102
6 15
7 7 9 20 18 17 17 17 18 18 18 19 17 17 18 100
11 118
11 11 11 9 19
40% 50
11 12 13 17 17 19 18 18 17 18 18 18 18 20 20 18 18
18 0
20% -50
30 31 29 29 28 31 26 28 29 29 28 27 27 27 25 26 27 26
22
-100
0%
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23

May-23

Jul-23

Oct-23
Nov-23
Apr-23

Jun-23

Aug-23
Sep-23

Dec-23
Jan-24
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23

May-23

Jul-23
Apr-23

Oct-23
Nov-23
Dec-23
Jan-24
Jun-23

Aug-23
Sep-23

Source: PhillipCapital India Research, RBI, NPCI

Source: PhillipCapital India Research, RBI, NPCI

Monthly spends per credit card for most players inching up Rejection volumes (NACH) are lowest in a decade
post-covid 14.0
IIB Amex HDFCB
CitiBank ICICIBC RBL 12.0
40,000
AXSB KMBB SBI Cards
35,000 10.0

30,000 8.0
25,000
6.0
20,000
4.0
15,000
10,000 2.0
5,000
0.0
Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22

Jul-23
Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23

Jan-24

0
Jul-23
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23

May-23
Apr-23

Oct-23
Nov-23
Dec-23
Jan-24
Jun-23

Aug-23
Sep-23

Source: PhillipCapital India Research, RBI, NPCI

Source: PhillipCapital India Research, RBI, NPCI

Page | 8 | PHILLIPCAPITAL INDIA RESEARCH

 Thousands

0
100
150
200
250
300
350
400
450

50

100
200
300
400
500

0
0
200
400
600
800
1000
1200
1400
1600
Jun-20 Jun-20
Aug-20 Jun-21
Aug-20 Jul-21
Oct-20 Oct-20 Aug-21
Dec-20 Sep-21
Dec-20 Oct-21
Feb-21 Nov-21
Feb-21
Apr-21 Dec-21 Cash ADTO (Rs bn)
Apr-21 Jun-21 Jan-22
Jun-21 Feb-22
Aug-21 Mar-22
Aug-21 Oct-21 Apr-22
Oct-21 May-22

Source: PhillipCapital India Research

Source: PhillipCapital India Research
Dec-21

NSE
Jun-22
Dec-21 Feb-22 Jul-22
NSE
Feb-22 Apr-22 Aug-22
Sep-22

Equity derivatives (ADTO, Rs trn)

Apr-22 Jun-22 Oct-22

Commodities Futures ADTO (Rs bn)

Jun-22 Aug-22 Nov-22
BSE

Page | 9 | PHILLIPCAPITAL INDIA RESEARCH

Aug-22 Oct-22 Dec-22
Jan-23
Oct-22 Dec-22 Feb-23

Source: PhillipCapital India Research, as of 08th Dec 2023

BSE (RHS)
Dec-22 Feb-23 Mar-23
Apr-23
Feb-23 Apr-23 May-23
Apr-23 Jun-23 Jun-23
Aug-23 Jul-23
Jun-23 Aug-23
Aug-23 Oct-23 Sep-23
Dec-23 Oct-23
Oct-23 Nov-23
Feb-24 Dec-23
Dec-23 Jan-24
Feb-24 Feb-24
Capital Markets- Trading Volume staring to normalize

0
10
20
30
40
50
60
70
80

200
400
600
800
1000
1200
1400

0
0
100
120
140
160

20
40
60
80
Jun-20 May-20
Jun-21 Jul-20
Aug-20 Jul-21
Aug-21 Sep-20
Oct-20 Sep-21
Oct-21
CDSL Nov-20
Dec-20 Jan-21
Nov-21
Feb-21 Dec-21 Mar-21
Apr-21 Jan-22 May-21
Feb-22
Demat account (mn)

Jun-21 Mar-22 Jul-21

Apr-22 Sep-21
NSDL

Aug-21
Normal Rate

May-22

Energy
Oct-21 Jun-22 Nov-21

Source: PhillipCapital India Research

Source: PhillipCapital India Research

Source: PhillipCapital India Research

Jul-22 Jan-22
Dec-21 Aug-22
Feb-22 Sep-22 Mar-22
BSE Cash Equities (ADTO, Rs bn)

Oct-22 May-22

Commodity Option ADTO (Rs bn)

Metal
Apr-22 Nov-22
Dec-22 Jul-22
Jun-22
BFSI WEEKLY SECTOR UPDATE

Jan-23 Sep-22
Aug-22 Feb-23 Nov-22
Oct-22 Mar-23
Apr-23 Jan-23

Bullion
Dec-22 May-23 Mar-23
Jun-23 May-23
Feb-23 Jul-23
Apr-23 Aug-23 Jul-23
Sep-23
Special Rate (RSHS)

Jun-23 Oct-23 Sep-23

Aug-23 Nov-23 Nov-23
Dec-23 Jan-24
Oct-23 Jan-24
-

Incremental Demat Account, rhs

Dec-23
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5

0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0

Feb-24
 BFSI WEEKLY SECTOR UPDATE

Life Insurance Premium growth remains Robust

APE Growth for Feb-24 APE growth Driver (Feb 2024)

Individual APE Group APE Total APE NOP Avg Ticket Size
150% 33%
35%
100%
100% 30%
61%
25% 23%
50% 28% 34% 34% 35% 28% 22%
25% 26%
4% 8% 20%
16.4%
0%
15%
-50% 9.0%
10% 8%
6%
-100% 5%
1%
-123% 0%
-150%
HDFC Life IPRUL Max Life SBI Life
HDFC Life IPRUL Max Life SBI Life
Source: PhillipCapital India Research Source: PhillipCapital India Research

Total APE Individual APE

HDFC Life IPRUL Max Life SBI Life HDFC Life IPRUL Max Life SBI Life
100% 60%
50%
80%
40%
60% 30%
40% 20%
10%
20% 0%
0% -10%
-20%
-20%
-30%
-40% -40%

Source: PhillipCapital India Research Source: PhillipCapital India Research

Page | 10 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

General Insurance Growth rebounding

GDPI growth (Rolling 3 Month) Key Segment growth (Rolling 3 Month)
Motor OD Motor TP Health- Retail P&C
ICICIGI BAGIC STARHEALTH GODIGIT
120% 40%

100%
30%
80%
20%
60%
10%
40%
0%
20%

0% -10%

-20% -20%
Jul-21

Oct-21
Nov-21
Dec-21
Jan-22
Mar-22

Jul-22

Oct-22
Nov-22
Dec-22
Jan-23
Mar-23
Apr-23
May-23
Jul-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Jun-21
Aug-21
Sep-21

Feb-22
Apr-22
May-22
Jun-22
Aug-22
Sep-22

Feb-23

Jun-23
Aug-23

Jul-21

Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jul-22

Oct-22
Nov-22
Dec-22
Jan-23
Mar-23
Apr-23
May-23
Jul-23

Oct-23
Nov-23
Dec-23
Jan-24
Jun-21
Aug-21
Sep-21

Jun-22
Aug-22
Sep-22

Feb-23

Jun-23
Aug-23
Sep-23
Source: PhillipCapital India Research Source: PhillipCapital India Research

Segment wise growth (Jan 2024) Segment wise growth (YTD FY24)

P&C 23% Total Health 22%

Total
Healt 22% Health- Retail 19%
h

Moto
18% Motor OD 19%
r OD

Moto Motor TP 13%

8%
r TP

Healt
h- P&C 7%
0%
Retail

Source: PhillipCapital India Research Source: PhillipCapital India Research

AMC flow data (monthly)

Equity flow (Rs bn) SIP Flows
Flows ex NFOs NFOs SIP Flows (Rs bn, RHS) New SIP Registered
300
6.00 SIP Discontinued 250.0
250
5.00 200.0
200
4.00
150 150.0
3.00
100
100.0
2.00
50
1.00 50.0
0
- -
-50
Apr-23
Jul-21

Jul-22

Jul-23
Jun-21
Apr-21
May-21
Aug-21

Dec-21
Sep-21
Oct-21
Jan-22

Aug-22

Dec-22
Feb-22
Mar-22
Apr-22
May-22

Sep-22
Oct-22
Jan-23
Feb-23
Mar-23
May-23
Aug-23
Sep-23
Oct-23
Dec-23
Jan-24
Feb-24
Nov-21

Jun-22

Nov-22

Jun-23

Nov-23
May-21
Jul-21

May-22
Jul-22

May-23
Jul-23
Apr-21

Oct-21
Nov-21
Dec-21
Jan-22
Mar-22
Apr-22

Sep-22
Oct-22
Nov-22

Oct-23
Dec-22
Jan-23
Mar-23
Apr-23

Nov-23
Dec-23
Jan-24
Jun-21
Aug-21
Sep-21

Feb-22

Jun-22
Aug-22

Feb-23

Jun-23
Aug-23
Sep-23

Feb-24

Source: PhillipCapital India Research Source: PhillipCapital India Research

Page | 11 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

Stock performance
1 Week Stock Performance 1 Month Stock Performance

CIFC 3% AnandRAT 16%

BAF 2% IPRU 14%
HDFCB 1% ICICIBC 9%
360One 0% 360One 8%
IPRU -1% SBIN 6%
ICICIGI -1% HDFCB 5%
ICICIBC -1% HDFCLife 5%
HDFCLife -1% SBIlife 4%
STARHEAL -1% IIB 3%
AnandRAT -2% AXSB 3%
KMB -2% SHFL 3%
SBIlife -2% BOB 2%
SHFL -2% ICICIGI 2%
MAXF -3% KMB 1%
MUTH -3% ABSLAMC 1%
HDFCAMC -3% INBK 0%
IIB -4% HDFCAMC 0%
AXSB -4% MUTH 0%
RECL -4% MAXF -1%
SBIN -5% RECL -1%
POWF -6% STARHEAL -1%
INBK -7% BAF -2%
UTIAM -7% CIFC -5%
MMFS -7% LICHF -5%
BOB -8% MMFS -6%
LICHF -8% POWF -6%
MGFL -8% NAM -7%
REPCO -8% MCX -8%
Equitasb -8% MGFL -8%
BANDHAN -8% DCBB -9%
ABSLAMC -9% Equitasb -9%
MCX -9% UTIAM -10%
DCBB -10% BANDHAN -11%
LICI -10% Prudent -11%
ANGELONE -12% LICI -11%
Prudent -12% REPCO -12%
NAM -12% BSE -15%
BSE -12% ANGELONE -24%
-15% -10% -5% 0% 5% -30% -20% -10% 0% 10% 20%

Source: PhillipCapital India Research Source: PhillipCapital India Research

6 month Stock Performance

AnandRAT 169%
RECL 83%
MCX 80%
POWF 78%
BSE 58%
LICI 36%
NAM 34%
HDFCAMC 33%
360One 32%
LICHF 29%
ANGELONE 29%
INBK 26%
SBIN 25%
BOB 24%
SHFL 21%
ICICIGI 19%
ABSLAMC 14%
MGFL 13%
ICICIBC 9%
SBIlife 8%
Equitasb 7%
AXSB 5%
UTIAM 3%
IIB 3%
MUTH 2%
MAXF 2%
Prudent -1%
IPRU -4%
REPCO -5%
KMB -5%
DCBB -5%
HDFCLife -6%
HDFCB -12%
MMFS -13%
BAF -14%
CIFC -15%
STARHEAL -16%
BANDHAN -28%
-50% 0% 50% 100% 150% 200%

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 BFSI WEEKLY SECTOR UPDATE

Valuation matrix
Banks
Stocks Reco M.Cap CMP (Rs.) TP (Rs) % Upside P/E P/ABV
(Rs. bn) FY24e FY25e FY26e FY24e FY25e FY26e
AXSB BUY 3,334 1,080 1240 15% 13.7 12.5 11.3 2.0 1.8 1.5
BANDHAN BUY 288 179 280 57% 10.0 8.6 7.5 1.5 1.3 1.1
BOB NEU 1,349 261 220 -16% 7.8 7.3 7.3 1.4 1.2 1.1
DCBB NEU 36 114 130 14% 7.2 6.6 6.1 0.9 0.8 0.7
Equitas SFB BUY 104 92 120 30% 12.6 10.7 8.9 1.9 1.7 1.5
HDFCB BUY 11,094 1,460 1920 31% 16.5 13.5 12.1 2.4 2.1 1.8
ICICIBC BUY 7,609 1,084 1200 11% 16.6 14.9 13.2 3.0 2.6 2.2
IIB BUY 1,164 1,495 1,860 24% 12.9 10.9 9.3 1.9 1.7 1.5
INBK NEU 675 501 470 -6% 8.6 7.6 7.1 1.4 1.2 1.1
KMB BUY 3,438 1,730 2100 21% 21.8 19.6 17.7 3.1 2.6 2.2
SBIN BUY 6,669 747 720 -4% 9.5 8.6 8.7 1.7 1.4 1.3
NBFC
Stocks Reco M.Cap CMP (Rs.) TP (Rs) % Upside P/E P/BV
(Rs. bn) FY24e FY25e FY26e FY24e FY25e FY26e
POWF BUY 1,312 398 500 26% 9.5 8.6 8.0 2.1 1.8 1.5
RECL BUY 1181 449 520 16% 8.4 7.8 6.8 1.8 1.5 1.3
BAF BUY 3,990 6,456 10,000 56% 27.8 21.7 16.2 5.2 4.3 3.5
CIFC BUY 880.4 1,048 1,370 28% 28.8 24.0 21.6 4.7 4.0 3.4
SHFL BUY 872 2,321 3,000 23% 12.7 10.7 8.5 1.8 1.6 1.4
MMFS BUY 324.9 263 350 24% 20.6 11.7 10.1 1.9 1.8 1.6
LICHF NEUTRAL 325 590 600 -5% 7.1 8.0 7.0 1.1 1.0 0.9
REPCO NEUTRAL 23.5 375 450 8% 6.9 7.8 6.9 0.9 0.8 0.7
MGFL SELL 136 160 150 -12% 8.7 7.1 6.7 1.4 1.2 1.1
MUTH BUY 542.2 1,351 1,750 25% 13.9 11.3 9.9 2.3 2.0 1.7
Life Insurance BUY
Stocks Reco M.Cap CMP (Rs.) TP (Rs) % Upside P/EV P/VNB
(Rs. bn) FY23 FY24e FY25e FY23 FY24e FY25e
HDFC Life BUY 1,301 605 785 30% 2.7 2.3 1.9 23.1 16.4 11.7
IPRU Life BUY 826 574 675 18% 2.0 1.8 1.5 18.2 12.6 8.8
Max Life BUY 329 952 1,050 10% 1.9 1.6 1.3 10.0 6.5 3.8
SBI Life BUY 1,489 1,487 1,675 13% 2.7 2.2 1.9 16.6 12.3 8.8
General Insurance
Stocks Reco M.Cap CMP (Rs.) TP (Rs) % Upside P/E P/BV
(Rs. bn) FY23 FY24e FY25e FY23 FY24e FY25e
ICICIGI BUY 809 1,643 1,525 -7% 42.3 36.2 30.5 6.4 5.7 5.0
Star Health BUY 319 546 725 33% 36.3 27.4 22.1 4.6 3.8 3.2
AMC
Stocks Reco M.Cap CMP (Rs.) TP (Rs) % Upside P/E P/AUM
(Rs. bn) FY23 FY24e FY25e FY23 FY24e FY25e
HDFCAMC Neutral 776 3,636 2750 -24% 40.4 33.5 29.1 13% 11% 9%
NAM BUY 280 445 370 -17% 27.2 24.1 22.0 7% 6% 6%
Source: Company, PhillipCapital India Research Estimates

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 BFSI WEEKLY SECTOR UPDATE

Rating Methodology
We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one year.
We have different threshold for large market capitalisation stock and Mid/small market capitalisation stock.
The categorisation of stock based on market capitalisation is as per the SEBI requirement.

Large cap stocks

Rating Criteria Definition
BUY >= +10% Target price is equal to or more than 10% of current market price
NEUTRAL -10% > to < +10% Target price is less than +10% but more than -10%
SELL <= -10% Target price is less than or equal to -10%.

Mid cap and Small cap stocks

Rating Criteria Definition
BUY >= +15% Target price is equal to or more than 15% of current market price
NEUTRAL -15% > to < +15% Target price is less than +15% but more than -15%
SELL <= -15% Target price is less than or equal to -15%.

Disclosures and Disclaimers

PhillipCapital (India) Pvt. Ltd. has three independent equity research groups: Institutional Equities, Institutional Equity Derivatives, and Private Client Group.
This report has been prepared by Institutional Equities Group. The views and opinions expressed in this document may, may not match, or may be contrary at
times with the views, estimates, rating, and target price of the other equity research groups of PhillipCapital (India) Pvt. Ltd.
This report is issued by PhillipCapital (India) Pvt. Ltd., which is regulated by the SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd.
References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for
information purposes only, and neither the information contained herein, nor any opinion expressed should be construed or deemed to be construed as
solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives. The information and opinions contained in
the report were considered by PCIPL to be valid when published. The report also contains information provided to PCIPL by third parties. The source of such
information will usually be disclosed in the report. Whilst PCIPL has taken all reasonable steps to ensure that this information is correct, PCIPL does not offer
any warranty as to the accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or
her own risk and PCIPL does not accept any liability as a result. Securities and Derivatives markets may be subject to rapid and unexpected price movements
and past performance is not necessarily an indication of future performance.
This report does not regard the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report.
Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding the appropriateness
of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future
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Certifications: The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the
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research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific views or recommendations contained in this research report.
Additional Disclosures of Interest:
Unless specifically mentioned in Point No. 9 below:
1. The Research Analyst(s), PCIL, or its associates or relatives of the Research Analyst does not have any financial interest in the company(ies) covered in this
report.
2. The Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively do not hold more than 1% of the securities of the
company (ies)covered in this report as of the end of the month immediately preceding the distribution of the research report.
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4. The Research Analyst, PCIL, and its associates have not received compensation for investment banking or merchant banking or brokerage services or for
any other products or services from the company(ies) covered in this report, in the past twelve months.
5. The Research Analyst, PCIL or its associates have not managed or co(managed in the previous twelve months, a private or public offering of securities for
the company (ies) covered in this report.
6. PCIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party, in connection
with the research report.
7. The Research Analyst has not served as an Officer, Director, or employee of the company (ies) covered in the Research report.
8. The Research Analyst and PCIL has not been engaged in market making activity for the company(ies) covered in the Research report.
9. Details of PCIL, Research Analyst and its associates pertaining to the companies covered in the Research report:

Page | 14 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

Sr. no. Particulars Yes/No

1 Whether compensation has been received from the company(ies) covered in the Research report in the past 12 months for No
investment banking transaction by PCIL
2 Whether Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively hold more than 1% No
of the company(ies) covered in the Research report
3 Whether compensation has been received by PCIL or its associates from the company(ies) covered in the Research report No
4 PCIL or its affiliates have managed or co(managed in the previous twelve months a private or public offering of securities for the No
company(ies) covered in the Research report
5 Research Analyst, his associate, PCIL or its associates have received compensation for investment banking or merchant banking No
or brokerage services or for any other products or services from the company(ies) covered in the Research report, in the last
twelve months

Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment
banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek
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securities mentioned in this research report, although it, or its affiliates/employees, may have positions in, purchase or sell, or be materially interested in any
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Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or
particular requirements of any individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors.
Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal, tax and
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value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic, or political
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Sources, Completeness and Accuracy: The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be
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Rosenblatt Securities Inc. or its affiliates does not ‘beneficially own,’ as determined in accordance with Section 13(d) of the Exchange Act, 1% or more of any of
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not aware of any material conflict of interest as of the date of this publication

Page | 15 | PHILLIPCAPITAL INDIA RESEARCH

 BFSI WEEKLY SECTOR UPDATE

Compensation and Investment Banking Activities

Rosenblatt Securities Inc. or any affiliate has not managed or co(managed a public offering of securities for the subject company in the past 12 months, nor
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Digitally signed by MANISH AGARWALLA

MANISH
DN: c=IN, o=PHILLIPCAPITAL INDIA
PRIVATE LIMITED, ou=EMPLOYEE,
postalCode=400013, st=Maharashtra,

AGARWALLA
serialNumber=8F2FAC440030280867A204
DE68440ACC0F02155E901622E89B053BA0
537514A1, cn=MANISH AGARWALLA
Date: 2024.03.13 17:16:20 +05'30'

Page | 16 | PHILLIPCAPITAL INDIA RESEARCH