Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  NATIONAL STOCK EXCHANGE OF INDIA  >  CRISIL Ltd.    CRISIL   INE007A01025

CRISIL LTD. (CRISIL)
Mes dernières consult.
Most popular
Report
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets
The feature you requested does not exist. However, we suggest the following feature:

Loan against property delinquencies set to rise 70 bps this fiscal: CRISIL

share with twitter share with LinkedIn share with facebook
share via e-mail
0
12/15/2017 | 05:30pm CET

Delinquencies in the loan against property (LAP) market are set to rise 70 basis points (bps) to 3.3% this fiscal, even as underlying risks stemming from moderating growth, intensifying competition and falling yields come to the fore.

While CRISIL had flagged these risks in November 2016, the rise in delinquencies (measured by 90 days’ past due, or dpd) has been sharper and sooner than expected, affecting non-banks (including non-banking finance companies, or NBFCs, and housing finance companies, or HFCs).

The LAP segment has been growing at break-neck speed, with assets under management (AUM) rising 17% to Rs1.7 lakh cr in fiscal 2017 from Rs1.5 lakh crore in 2016, which, in turn, was a 29% growth over 2015. Banks then joined the fray because of continuing sluggish demand for corporate credit.

But this rising trend in AUM is set to reverse with risks manifesting and delinquencies rising. CRISIL foresees a 200-400 basis points (bps) decline in AUM growth to 13-15% by fiscal 2020, as competition from banks intensifies and ticket sizes of loans shrink.

And intensifying competition has meant ‘seasoning’ of LAP loans – which is important to asset quality has been low, with aggressive intermediaries spurring balance transfers in approximately 7 out of 10 loans. While the typical contracted tenure of a LAP product is 7-10 years, majority of customers have been shifting out in 36- 42 months.

To get a handle on asset quality when adjusting for rapid growth and low seasoning, CRISIL considers delinquencies on a two-year lagged basis. By this yardstick, delinquencies are expected to rise even more, to 4.5%, this fiscal, or 370 bps higher than what’s expected in home loans.

“Interestingly, the rise in delinquencies last fiscal was not uniform,” said Krishnan Sitaraman, Senior Director, CRISIL Ratings. “While large HFCs and a few NBFCs with robust diligence ecosystems managed their portfolios well, some others have reported over 100 bps increase. We believe systemic delinquencies will rise further as LAP portfolios season.”

Intense competition has also culled yields by 200 bps in the past 18 months, materially narrowing the spreads between LAP and home loan rates. But profitability is unlikely to decline by much because borrowings costs have fallen, too. As a result, CRISIL estimates net interest margins (NIMs) to slip 50-70 bps to 3.5-4% this fiscal.

To be sure, credit costs will pick up as delinquencies rise, but they will remain manageable. That, coupled with income from prepayment charges of 2-4%, is expected to result in return on assets of 1.4-1.8% this fiscal, compared with 2-2.5% in fiscal 2016.

Given the pressure on yields, ability to manage operating and credit costs will determine business sustainability over the medium term. So non-banks with a large customer base – and therefore, cross-selling opportunities could benefit from lower cost of customer acquisition and access to credit history.

“One LAP segment where yields and profitability have sustained so far is loans below Rs 25 lakh, because of fewer lenders,” said Subha Sri Narayanan, Associate Director, CRISIL Ratings. “However, small-ticket loans are not an easy business to master. Higher risks to cash flows of borrowers, collateral quality issues, and high operational intensity make rapid scale-up difficult in the segment.”

Lenders that prudently assess borrower cash flows, control loan-to-value ratios, practice strict valuation discipline, and keep a hawk’s eye on portfolios will be able to sustain a profitable business over the longer term.

In this business, cash flows are the key driver of repayment trends, and collaterals offer only a fall-back option.

(c) 2017India Infoline Ltd. All rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on CRISIL LTD.
12/15 LOAN AGAINST PROPERTY DELINQUENCIES : Crisil
12/15 CRISIL : Indian shrimp exports set to nearly double to $7 billion by 2022-CRISIL
12/15 CRISIL : Loan against property delinquencies set to rise 70 bps this fiscal-Cris..
12/01 CRISIL : Municipalities may raise Rs 6,000 cr from bonds by FY20
11/30 Indiabulls Housing Finance’s rating upgraded by S&P to AAA
11/30 CRISIL : 'MUNICIPALITIES MAY RAISE Rs6,000 CRORE FROM BONDS'
11/28 CRISIL : BUYS PRAGMATIX FOR Rs56 CRORE
11/25 CRISIL : Lending to SMEs seen rising 11% over two years
11/25 CRISIL : NBFCs look to small businesses to build loan book
11/24 CRISIL : 'NBFCs TO ACCOUNT FOR 19% OF OVERALL LOAN MARKET BY FY20'
More news
Financials ( INR)
Sales 2017 16 888 M
EBIT 2017 4 382 M
Net income 2017 3 229 M
Debt 2017 -
Yield 2017 1,67%
P/E ratio 2017 40,17
P/E ratio 2018 34,27
Capi. / Sales 2017 7,71x
Capi. / Sales 2018 6,85x
Capitalization 130 B
Chart CRISIL LTD.
Duration : Period :
CRISIL Ltd. Technical Analysis Chart | CRISIL | INE007A01025 | 4-Traders
Technical analysis trends CRISIL LTD.
Short TermMid-TermLong Term
TrendsBearishNeutralBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 6
Average target price 1 952  INR
Spread / Average Target 7,5%
EPS Revisions
Managers
NameTitle
Ashu Suyash Chief Executive Officer, MD & Director
John L. Berisford Chairman
Amish Pramod Mehta Chief Operating Officer
Krishnan Venkateswaran Senior Director-Corporate Technology
Nachiket Madhusudhan Mor Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
CRISIL LTD.-18.09%2 032
RELX19.32%47 431
RELX N.V.21.20%47 425
S&P GLOBAL INC57.16%43 108
THOMSON REUTERS CORP-3.41%31 483
MOODY'S CORPORATION59.30%28 759