Repco Home Finance Q3 Results Review - Asset Quality Improved; Valuations Comfortable: IDBI Capital

IDBI Capital Report

Repco Home Finance Ltd.'s assets under management growth remained steady at 7.8% YoY (up 2% QoQ) led by 9% YoY growth in disbursements. Management retained guidance at 12% AUM growth for FY24.

Net interest margin declined slightly by 10 basis points QoQ to 5.3% led by increase in cost of funds. Management guided NIMs at 5.1% for FY25. Asset quality continued to witness improvement during the quarter with gross non-performing assets at 4.7% versus 4.9 % QoQ and PCR (on stage 3) improving from 51% (Q1 FY24) to 60% in (Q3 FY24).

Net Interest Income grew by 18% YoY led by improvement in NIMs. Profit after tax grew by 23% YoY led by lower operating expenses (up 3% YoY) which supported return of equity at 3.1% (highest in last three years).

We have moved to FY26E estimates and maintain our “Buy” rating with revised target price of 535 (earlier 515), valuing it at 1.0 times price/adjusted book value FY26E.

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