Repco Home Finance’s (REPCO) 1QFY17 PAT grew 30.8% YoY (5% beat), driven by strong NII growth (+27% YoY, 3% beat) and significant cost control. Moreover, operating expenses declined 3.5% YoY (20% miss). Business momentum remained healthy, with the loan book up 26% YoY to INR79.6b, in line with prior quarters’ growth trajectory. However, sanctions and disbursements in 1QFY17 grew only 3% each due to the impact of Tamil Nadu state elections. However, management expects disbursement growth to pick up going forward. The loan mix shifted marginally toward self-employed (59.1% share v/s 57.1% in 1QFY16). The share of LAP loans also increased marginally to 20.1%. Margins remained stable YoY at 4.3%. Asset quality remained stable YoY with GNPLs at 2.22% (also 2.22% in 1QFY16). However, REPCO made provisions of INR179m v/s INR113m in 1QFY16 in order to increase PCR, which stood 45.1% v/s 41.8% last year. Operating expenses fell 3.5% YoY, with an equivalent decline in both employee and other operating expenses. As a result, C/I ratio declined ~500bp YoY to 16.2%.Motilal Oswal Maintain Buy with a TP of INR966/share (4.5x FY18 BV).