Research Report

The on-book portfolio of the non-banking financial companies-housing finance companies (NBFC-HFC) sector grew by around 16% year-on-year (YoY; estimated) in Q1FY2026 and FY2025. With demand expected to remain firm, ICRA expects the growth momentum to continue during the rest of FY2026 as well. ICRA maintains its growth estimate of 14-16% for HFCs’ on-book portfolio for FY2026. With the rate cuts being reflected more quickly in debt capital markets, the proportion of NCDs rose to 37% as on June 30, 2025 and is expected to remain stable. CP funding has remained limited in recent years as HFCs focused on addressing asset-liability mismatches.

• Slight uptick in GNPAs in Q1 FY2026, expected to remain stable by fiscal end: HFCs witnessed a slight rise of approximately 10 bps in GNPAs, reaching 1.7% in Q1 FY2026, consistent with previous patterns.
  
• Adequate capital profile and liquidity: The industry’s capital profile is adequate with the same expected to remain sufficient for meeting the growth targets.
  

Source: Financials of HFCs and ICRA’s estimates; P – Projected; Amount in Rs. lakh crore