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Following a downturn in Q1, the MFI book exhibited signs of recovery with a 5% quarter-on-quarter growth, representing half of the total loan book at Rs 540 billion. Deposits also saw an upward trend, increasing by 13% year-on-year and 3% quarter-on-quarter. The improved Current Account Savings Account (CASA) mix, driven by raised savings account rates, played a key role in limiting savings account to term deposit migration.
The Gross Non-Performing Assets (NPA) experienced an uptick of 57 basis points quarter-on-quarter, reaching 7.3%, due to higher slippages. On a brighter note, the Special Mention Account (SMA) book contracted by 130 basis points quarter-on-quarter to stand at 4.2%, a move that is anticipated to lower the slippage run-rate.
Brokerage firm Motilal Oswal retains its ‘Neutral’ rating on the banking stock with a target price of Rs 250 per share, as reported by Bloomberg Quint.
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