6 November 2018 GRUH Finance (GRHF) reported 2QFY19 PAT of INR1.06b, up 20% YoY (8% miss compared to our estimate of INR1.14b). While net interest income was largely in line, higher-than-expected operating expenses drove the PAT miss. Disbursements for the quarter picked up smartly on a QoQ basis from INR12b to INR15b. Annualized repayment rate, too, has moderated from 25% in 2QFY18 to 21% this quarter. Loan growth was in line with prior quarters at 4% QoQ/ 17% YoY. The company continues to slow down on LAP growth in LAP has been sub- 10% YoY for the second consecutive quarter. Borrowings grew 14% QoQ in order to maintain liquidity on the balance sheet. CoF for the quarter was up only 10bp sequentially to 7.5%. It has been range-bound at 7.4-7.6% for the past 5-6 quarters.