HDFC Securities’ research report on Repco Home Finance
REPCOs 4Q numbers beat estimates given the claw back in asset quality (GNPAs dipped ~20% QoQ). Though overall growth (+10% YoY) was sluggish, it was largely owing to (deliberately) tepid growth in LAP (up merely 2%). Credit costs dipped (60bps ann. vs. 83bps in 3Q) as REPCO wrote back provisions of Rs 28mn. NIMs too improved 20bps QoQ to 4.8% as yields remained flat and COF dipped 30bps.
We like REPCO for its steady (if slow) healing, 2%+ RoAAs and the sizable addressable opportunity. Maintain BUY with a TP of Rs 683 (2.5x Mar-20 ABV of Rs 273).
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First Published on May 31, 2018 04:35 pm