Since last 2 years every guru and analyst have been telling us Interest rates in India have peaked and we have been arguing exact opposite - we are far from a point of Interest Rate peak. Against emotional reasons or gut feel by others we are supporting our logic of 'far from peak' theory by giving historical chart of SBI's Prime Landing Rate (PLR) since 1970 :-).
We attach latest SBI's PLR historical chart:
If we see above chart we can say even after recent minor cut in PLR (currently at 14.45%) there are hardly any signs of top, on the contrary we may actually see another wave of RISING rates in coming months (post Q3 CY13?) which could make final peak. See how peak was made in 1993.
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2 comments:
Hi Jigs,
If the interest rates continue to be high for next 2 yrs, is it safe to assume that NBFCs' will continue to flourish during this period?
Regards
Roberto
Roberto,
NBFCs do NOT follow Interest Rate trend I feel. I think it follows consumption theme. When you see people buying House, Car, Appliances - so broadly consumerism these companies make good business. Irrespective of interest rate they make money from spread anyway.
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