Buy Repco Home Finance; target of Rs 592: HDFC Securities

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

HDFC Securities' research report on Repco Home Finance

Seasonal Improvement in Asset Quality: Broad based improvement was visible (GNPAs ~3%, -90bps QoQ), with a ~180bps decline in LAP NPAs (5%) and a ~70bps decline in Home Loan NPAs (~2.5%). The improvement played out across segments, too, with a decline in salaried (-40bps) and non-salaried (-130bps) NPAs. Caution on large ticket LAP is welcome. We have factored in GNPAs of ~2.8% over FY19-21E. LAP recoveries remain a crucial monitorable. Seasonal Uptick in Growth: Disbursals grew ~4/20% to ~Rs 8.8bn led by LAP (+28%). AUM growth was contained at ~12/4%, as repayment rates increased ~180bps QoQ to 19%, surprisingly. A sustained increase in salaried loans in the mix (45.9%, +300/100bps) augurs well for asset quality. Geographical diversification of the book continues in line with guidance. We expect AUM growth of ~ 13% over FY19-21E, as ex-TN growth picks up. Nevertheless, our growth estimates are unexciting
(given the small base).

Outlook

A slight uptick in growth, and improvement in asset quality (seasonal) made for a steady 4Q at Repco. With attractive valuations (1.36x FY21E), we maintain BUY with a TP of Rs 592 (2.0x Mar 21E ABV of Rs 296).

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.

Read More