Decent quarter.
Positives:
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Raise in interest rate, Since lending is based on cost plus model, whatever interest rate hike, they will get same margin. But a raise in interest rate will have positive yield in equity side of lending. Simply put raise in 1% of borrowing cost will improve ROE by 1%, assuming MoR maintains the margin rate.
-
Even though Haryana project does not move a needle in IRFC balance sheet, this is positive sign that new avenues are getting open for IRFC to lend
Negative:
- As and when lease agreements are signed for project assets, which are in moratorium (currently 90%), AUM growth will stop, balance sheet will stagnate.
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