Repco home Q2FY25: Strong QoQ Surge in Sanctions and Disbursements
Company Name: Repco Home Finance Ltd | NSE Code: REPCOHOME | BSE Code: 535322 | 52 Week high/low:595 / 366 | CMP: INR 462 | Mcap: INR 2,904 Cr | P/BV – 1.00
About the stock
➡️Repco home finance is registered housing finance company offer individual home loan and loan against property (LAP). Companies target market is Tier 2 and Tier 3 cities and has 48% loan book to salaried segment and rest to non-salaried. Company have regional concentration in south and beyond south its presence in Maharashtra, Gujarat, MP, Orissa, Rajasthan. As of Q4FY24, company have 184 branch and 43 satellite.
Single digit loan book growth while borrowing jump 14% YoY
➡️Repco’s loan book grew 8% YoY (+2% QoQ) to 13,964 Cr led by growth in home loan product. Home loan composition in overall book decline to 74% in Q2FY25 from 76% in Q2FY24 whereas home equity grown to 26% from 24% in Q2FY24.
➡️Sanctions grew 8% YoY while jump 27% QoQ to 926 Cr. While disbursement surged 9% YoY and 27% QoQ to 867 Cr. Sanctions and disbursement deliver solid performance on QoQ basis.
➡️Borrowing growth is double than loan book growth at 14% YoY (+5% QoQ) to 11,463 Cr. Repco has funding mix from National housing bank, commercial bank and repco bank. Commercial banks have 81% weight in overall borrowing.
| Book Growth (As on in Cr) | Q2FY25 | Q2FY24 | YoY (%) | Q1FY25 | QoQ (%) |
| Loan Book | 13,964 | 12,922 | 8% | 13,701 | 2% |
| Disbursement | 867 | 797 | 9% | 680 | 27% |
| Sanctions | 926 | 860 | 8% | 727 | 27% |
| Borrowing | 11,463 | 10,047 | 14% | 10,914 | 5% |
NII down on contraction in NIMs and muted book growth; PAT boom on lower provision
➡️Interest income grew 7% YoY (+1% QoQ) to 405 Cr due to surge in yield by 30 bps YoY and loan book expansion. NII down 2% YoY and 1% QoQ to 165 Cr on contraction in NIMs by 30 bps due to higher CoF. PPOP grow modest by 2% YoY (-1% QoQ) to 137 Cr due to decline in topline and higher OpEx growth. PAT boom 15% YoY (+7% QoQ) to 112 Cr on lower provision by 1101%.
| Years (in Cr) | Q2FY25 | Q2FY24 | YoY (%) | Q1FY25 | QoQ (%) | Commentry |
| Interest income | 405.11 | 376.97 | 7% | 400.71 | 1% | |
| Interest expenses | 239.56 | 207.46 | 15% | 232.98 | 3% | |
| NII | 165.55 | 169.51 | -2% | 167.73 | -1% | led by drop in NIMs and muted book growth |
| Other income | 22.87 | 6.94 | 230% | 15.54 | 47% | |
| Total Net income | 188.42 | 176.45 | 7% | 183.27 | 3% | |
| Employee expenses | 28.35 | 25.45 | 11% | 29.05 | -2% | |
| Other OpEx | 23.33 | 17.18 | 36% | 16.18 | 44% | |
| Total Opex | 51.68 | 42.63 | 21% | 45.23 | 14% | |
| PPOP | 136.74 | 133.82 | 2% | 138.04 | -1% | Modest growth on sluggish topline |
| Provision | -16.02 | 1.6 | -1101% | 1.44 | -1213% | |
| PBT | 152.76 | 132.22 | 16% | 136.6 | 12% | |
| Tax expenses | 40.25 | 34.12 | 18% | 31.16 | 29% | |
| Tax rate | 26% | 26% | 2% | 23% | 16% | |
| PAT | 112.51 | 98.1 | 15% | 105.44 | 7% | PAT boom on lower provision and higher other income |
| PAT% | 26% | 26% | 3% | 25% | 4% | |
| EPS (in Rs) | 17.98 | 15.68 | 15% | 16.85 | 7% | |
| No. of equity shares | 6 | 6 | 0% | 6 | 0% |
Asset quality improved – GNPA /NPA down (90 bps/60 bps YoY)
➡️During the quarter, asset quality has improved with the decreased in GNPA and NNPA. GNPA down 90 bps YoY and 30 bps QoQ to stood at 4% but still higher than its peers. While NNPA down 60 bps YoY and 10 bps QoQ to stood at 1.6%. Based on observation salaried segment has lower GNPA (2.1%) while non-salaried has higher GNPA (5.7%).
| Asset Quality | Q2FY25 | Q2FY24 | YoY (bps) | Q1FY25 | QoQ (bps) |
| GNPA | 4 | 4.9 | -90 | 4.3 | -30 |
| NNPA | 1.6 | 2.2 | -60 | 1.7 | -10 |
Valuation and key ratio
➡️Currently the stock is trading at 1.00x its book value which is lowest compare it peers and industry median P/BV stood at 2.41x. Company’s NIMs margin has reduced by 30 bps YoY and remain stable QoQ stood at 5.1%. Yield on loan jump 30 bps YoY to stood at 12.1 while CoF grew 40 bps YoY to stood at 8.8%. ROE down 10 bps YoY to 16% while ROA jump 20 bps YoY to 3.3%. company’s capital position remains very strong as CRAR stood at 33.98% which above than the RBI guidelines.
| Key metrics | Q2FY25 | Q2FY24 | YoY (bps) | Q1FY25 | QoQ (bps) |
| Yield | 12.1 | 11.8 | 30 | 12 | 10 |
| CoF | 8.8 | 8.4 | 40 | 8.6 | 20 |
| Spread | 3.4 | 3.4 | 0 | 3.4 | 0 |
| NIMs | 5.1 | 5.4 | -30 | 5.1 | 0 |
| ROA | 3.3 | 3.1 | 20 | 3.1 | 20 |
| ROE | 16 | 16.1 | -10 | 16.3 | -30 |
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