Repco Home Finance Q4 Results Review - AUM Growth Improved Slightly; Valuations Comfortable: IDBI Capital

IDBI Capital Report

Repco Home Finance Ltd.’s assets under management growth improved slightly to 8.5% YoY versus 8% YoY (Q3 FY24) led by 18% QoQ growth in disbursements.

Management guided to reach Rs 150 billion loan book by FY25. Net interest margins declined by 20 bps QoQ to 5.1% led by decline in yield on advances. Management guided NIMs in the range of 4.8-5.2% for FY25.

Asset quality continued to witness improvement during the quarter with gross non-performing asset at 4.1% versus 4.7 % QoQ and provision coverage ratio (on stage-III improving from 51% (Q1 FY24) to 65% in (Q4 FY24).

Net interest income grew by 11% YoY led by improvement in NIMs. PAT grew by 32% YoY led by reversal of provisions (write back of Rs 100 million) which supported return on asset at 3% (highest in last three years).

We revised FY26E estimates upwards and maintain our “Buy” rating with revised target price of 595 (earlier 535), valuing it at 1.0 times price/book value FY26E.

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