Majority of concern is over the spread compression. Even though you see operating profit increases this quarter, this spread compression will reflect in next quarter. Same was asked extensively in concall and management’s have valid response to same. Their entire floating rate borrowing book will get adjusted immediately or max in quarterly manner, but their loan book adjusts on yearly basis. If someone borrowed loan from them on august, any interest rate change will happen only in august of every year. Currently 70% of book is not repriced to new interest rate which bring back the spread/nim to regular case, but there will be a lag.
Other than this there are some overhangs about things happened during the tenure of old CEO, any probable occurrence of RBI/NHB audit, New CEO appointment.
Some of the concerns raised in CNBC interview is laughable, they called 20% loan growth is slow down which is little higher than their historical growth, on average they grown their book by 18% in past.
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