YES Securities' research report on Repco Home Finance
Repco’s Q4 FY22 PAT was significantly below our estimate on higher credit cost, even though NII and PPOP were in-line. Loan book was sequentially flat as expected, but disbursements and portfolio run-off were 8-10% higher than our expectations. March disbursements were healthy at near Rs3bn (v/s Rs2.8bn yoy), and BT Out in the quarter was unusually higher at Rs4.6bn (Rs2.84bn in Q3 and Rs2.48bn in Q4 FY21). BT Out has come-off a bit in current quarter, and management expects it to moderate post the introduction of a Top-up loan product (CIBIL linked) and interest rate reduction powers (up to a certain level) for Branches and Regional Offices. Disbursements in Q1 FY23 is expected near Q4 FY22 level of Rs6bn and for the whole year is targeted at Rs30bn (Rs17.7bn in FY22). About 8-10 branches would be added in FY23.
Repco trades at an undemanding valuation of 0.4x P/ABV and 3x P/E on FY24 estimates. Retain BUY.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.