76 DALAL STREET INVESTMENT JOURNAL I JULY 22 - AUG 4, 2019 DSIJ. in^
Financial Review For FY19
Finance
T
he NBFC sector went through liquidity crisis in
FY19. The liquidity issue continues to impact the
performance of many companies in the sector.
However, there are signs that the situation is far
better than it was in Q3FY19. The crisis which hit
credit growth of the companies further impacted financial
status of these firms. Margins growth remained under pressure
for larger part of the last two quarters. The major reason for this
was the growth in NBFCs was affected as management decided
to curtail incremental AUM growth in order to maintain
liquidity. The situation became worse as the share of fund flow
from MFs to NBFC’s declined.
The sector can be expected to witness positive sentiment after
the recent announcements in the budget. The boost to
affordable housing will lead the way ahead for the market. The
announcements such as, tax holiday has been provided for
developers of affordable housing, proposal to provide additional
deduction of 1.5 lakh (3.5 lakh in total) for interest on loan
borrowed up to Mar 31, 2020 with a ticket size of `45 lakh, and
the total benefit of `7,00,000 on interest over loan tenure of 15
years will lead the way forward.The revenue growth in housing finance companies declined in
FY19. India's largest housing finance firm HDFC Ltd reported
growth of 21 per cent during FY19. The total revenue for the
period stood at `95671 crore. The topline of HDFC grew by 32
per cent in FY18 growth as compared to FY17. The decline in
one of the biggest firm’s revenue is an evidence of the pressure
in the finance sector.The Indiabulls Housing Finance suffered major decline during
last fiscal in terms of revenue. The revenue for FY19 grew by 14
per cent YoY to `17019.62. It had showed a growth of more
than 40 per cent in the earlier fiscal. Consequently, its net profit
growth declined very sharply to 5 per cent YoY in FY19.Government of India owned HUDCO can be biggest
Sector Sponsor