MFI sector was the most impacted in first wave of COVID-19: UBS Securities’ Vishal Goyal

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Vishal Goyal, Head-India Research & Banking Analyst at UBS Securities India, and RK Bansal, MD of Edelweiss ARC, spoke to CNBC-TV18 on how badly hurt is the MFI space, and about the resurgence of investors’ interest in public sector banks other than State Bank of India (SBI).

Vishal Goyal, Head-India Research & Banking Analyst at UBS Securities India, and RK Bansal, MD of Edelweiss ARC, spoke to CNBC-TV18 on how badly hurt is the MFI space, and about the resurgence of investors’ interest in public sector banks other than State Bank of India (SBI).
Goyal said, “Microfinance sector was the most impacted during COVID last year and therefore even after the end of the moratorium, we saw a huge built up of overdue book, which is the portfolio at risk (PAR) book, and we saw almost 17-18 percent of the loans turning overdue.”
He added, “What we saw in the last 10-12 years was very bad corporate NPL cycle, which impacted most of the PSU banks and also some of the private sector banks as well, and that is the time when the retail or defensive banks actually earn their premium valuations. It seems that since the corporate cycle has kind of ended, at least the previous one which was driven by infra, power, commodities all are turning in favour, to that extent, I think the balance sheet looks much better for the PSUs, and for some of the mid-sized banks.”
RK Bansal said, “In the second wave, the maximum stress has been in the SME space and especially in hospitality, so some of the stress which we are now seeing in the banking space is the large corporates. This round of stress is actually in SME, personal loans, unsecured loans and even in consumer finance and vehicle loans.”
For full interview, watch accompanying video.

Market Movers

CompanyPriceChange%Loss
Divis Labs4,313.05 -75.00
Coal India157.15 -2.20
Bajaj Finserv11,798.70 -127.45
Hindalco390.85 -3.95
Dr Reddys Labs5,410.85 -50.50
CompanyPriceChange%Loss
Bajaj Finserv11,799.05 -132.75
Dr Reddys Labs5,414.90 -44.65
Titan Company1,723.50 -11.80
Sun Pharma673.20 -4.05
Bajaj Finance6,160.70 -33.50
CompanyPriceChange%Loss
Divis Labs4,313.05 -75.00 -1.71
Coal India157.15 -2.20 -1.38
Bajaj Finserv11,798.70 -127.45 -1.07
Hindalco390.85 -3.95 -1.00
Dr Reddys Labs5,410.85 -50.50 -0.92
CompanyPriceChange%Loss
Bajaj Finserv11,799.05 -132.75 -1.11
Dr Reddys Labs5,414.90 -44.65 -0.82
Titan Company1,723.50 -11.80 -0.68
Sun Pharma673.20 -4.05 -0.60
Bajaj Finance6,160.70 -33.50 -0.54

Currency

CompanyPriceChng%Chng
Dollar-Rupee73.31250.04250.06
Euro-Rupee88.94300.27100.31
Pound-Rupee103.33400.08400.08
Rupee-100 Yen0.66580.00020.02