Hello Sir,

Hope you are doing well.

Remember, in 2017-18, housing finance stocks were all the rage.

Repco Home Finance too was quite famous then and was frequently quoted about on various business channels.

However, the stock peaked out around Rs 900 in June 2017 and went as low as 90 in May 2020. Since then, the stock has recovered to around current levels of 460 and the business is also showing signs of turnaround.

Mr. K Swaminathan took over the charge as Managing Director and CEO of the company in Feb 2022.

Below, we have shared interesting insights from the Q3 FY 24 con-call of Repco Home Finance to understand the current situation and the outlook for the company


Before that, a few days back, we released our new stock recommendation for our Alpha and Alpha + Members

Company’s main growth and profit driving segment has grown more than 10x in terms of sales and profit in the last 10 years. We believe it has the potential to double its PAT in the next 3 yrs

For details on the stock click HERE


Repco Home Finance – Notes from Q3 FY 24 con-call

  • Board has approved 3-year broad road map of reaching an AUM of at least INR 20,000 crores by 2027, with an addition of 40 branches per year
  • The GNPA is expected to go below 2% by then
  • If the company benefits on some external factors, like government schemes on affordable housing, the growth could be on a different plain, with the AUM reaching nearly INR 25,000 crores in 3 years

– Business Update

  • We were able to achieve a disbursement of INR 759 crores, against INR 696 crores in Q3 FY ’23, registering a growth of 9% Y-o-Y
  • Our AUM stands at INR 13,185 crores, an increase of 8% Y-o-Y
  • The ratio of exposure between the non-salaried and salaried segment stood at 51.3% and 48.7%, respectively
  • The share of non-housing loan, that is home equity as we call it, stood at 24.4% of loan book and housing loans contributed to about 75.6% of the book
  • Our NIM for Q3 FY ’24 was at 5.3%, up from 4.8% in Q3 FY ’23. The company has been able to maintain a spread of 3.41% by raising yields to 11.76%
  • Cost-to-income ratio for the quarter decreased marginally to 22.03%, against 23.2% of the previous quarter

– Asset Quality

  • We were able to reduce the GNPA from INR 637 crores to INR 618 crores, which is 4.7% of the AUM, and the net NPA stood at INR 247 crores at 1.9%
  • We have a total provision of INR 528 crores, with a provision coverage ratio of 60.1% for Stage-3 assets
  • As of 31st December ’23, we hold INR 547 crores of restructured portfolio outstanding, of which approximately INR178 crores are in Stage 3
  • Overall, under Stage 2, that is dues between 31 to 90 days, the exposure is around INR 1,500 crores, which is 12% of our AUM. Our aim is to bring down to less than 10% by March ’24
  • The NPA numbers have now reached a stage where almost all the 4,000 odd accounts we have now, it has almost reached a level where it is going to be an auction level
  • We have engaged some three or four exclusive legal people, mainly to follow up on SARFAESI related measures
  • In addition to attacking the existing NPAs, we are also following up on the present overdue accounts
  • Around 80 odd people are there in the field, which number also will increase over a period. These people are there to handle only our 1 plus DPDs
  • In our underwriting standards also, we are improving. So that the new book is not giving us additional problems. So whatever GNPAs that we are handling is only the existing ones, which we are tackling

– Branch network

  • As of 31st December 23, we have 200 touch points across 12 states and 1 union territory, comprising of 166 branches and 34 satellite centers
  • We will be touching 210 outlets by March ’24
  • So next year also, for example, when we are planning around 40 new branches, we will be having around 50% in Tamil Nadu and the remaining 50% will be non-Tamil Nadu regions

– Guidance

  • We are having a plan of growing normal — in the normal way that we are now growing, – that will be at 12% for this next year, 14% for the second year and 17% for the third year
  • So the new branches as well as the additional sales staff, all these are going to contribute to our improved numbers as far as growth is concerned




Disclaimer: This is not a recommendation to buy/sell Repco Home Finance. The securities quoted are for illustration only and are not recommendatory.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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