Non-banking financial companies (NBFCs) excel in providing tailored financial services. They serve markets often missed by traditional banks. This includes small businesses and people in smaller cities. This report examines NBFC performance for FY2025. It includes comparisons with similar companies.
ABCAPITAL +3.16% BAJFINANCE -0.41% CHOLAFIN -2.36% HDBFS -1.22% LTF -0.40% M&MFIN -0.41% SHRIRAMFIN -0.31% SUNDARMFIN -2.09%
NBFC credit grew faster than the economy. This happened from FY22 to FY25. It also grew faster than bank loans. NBFCs are expected to keep growing faster. This is even with slower growth after FY24.
NBFCs have created new ways to lend. They serve informal markets. They also help small businesses. Their share of total loans grew. It went from 12% in FY08 to 21% in FY25.
NBFCs are interesting now. Rate cuts help their funding costs. This could boost profits soon.
NBFCs had a moderate FY25. Growth was careful. Rules also became stricter. However, things are improving. Lower interest rates help. Inflation is falling. Consumer spending may rebound. It is a good time to compare NBFCs.
Key NBFC measures
Metric What it means Better metric
AUM (₹ Cr) Total loan value. Higher
PAT (₹ Cr) Total profit. Higher
RoA (%) Profit from assets. Higher
RoE (%) Profit from shareholder money. Higher
Net Interest Margin (NIM) Profit from lending. Higher
Cost of Funds (%) Cost to borrow money. Lower
Capital Adequacy Ratio (CAR) Capital versus loan risk. Higher
Debt/Equity Ratio Debt compared to capital. Lower
Credit Rating Ability to repay debt. Higher
Peer comparison
Assets under management
Bajaj Finance had the largest assets. Aditya Birla Finance grew the fastest. The industry is very spread out. Many companies have small market shares. This suggests room for mergers.
NBFC peer AUM comparison
Peers Aditya Birla Finance Bajaj Finance Cholamandalam Investment & Finance HDB Financial Services L&T Finance Mahindra & Mahindra Finance Shriram Finance Sundaram Finance
AUM in FY25 (₹ bn) 1,263.5 3,088.3 1,847.5 1,072.6 977.6 1,196.7 2,631.9 514.8
CAGR FY22–FY25 31.8% 28.2% 30.6% 20.4% 3.4% 14.5% 27.5% 20.4%
Source: Company Reports & Crisil Intelligence
Loan Book Quality: Secured vs. Unsecured Mix
Sundaram understands cautious risk. They focus on loans with collateral.