MSME Pulse for October 2020 - Angel Broking

Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd

"TransUnion Cibil report on MSME Pulse for October 2020 mentioned The non-performing assets (NPAs) ratio in the micro, small and medium enterprises (MSME) segment rose to 12.8% in Q1FY21, from 11.4% in Q1FY20. The disbursements to small enterprises gaining traction after the government had announced the Emergency Credit Line Guarantee Scheme (ECLGS), with state-owned banks ramping up disbursements to 2.6 times the levels seen in February. Private bank's MSME NPA ratio increased to 5.8% in Q1FY21 from 4.6% in Q1FY19 which is a moderate increase considering low economic activity. PSU bank's NPA ratio was higher in Q1FY20 and further increased in Q1FY21 to 18.6%. NBFC witnessed a very sharp jump in NPA from 5.8% in Q1FY20 to 9.7% in Q1FY21.

Now it is very crucial to monitor the MSME NPA ratio in Q2Y21 numbers. Low economic activity will certainly impact the cash generation ability of the MSME and eventually their debt-paying capacity."

Source : Equity Bulls

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