Repco Home Finance Ltd. share price target

demonetization. With a pick-up in disbursements, coupled with a favorable base, we expect loan growth for FY18 to be in mid-teens. Repayment rate in the quarter was 20.4%, in line with the past trends (excluding 1QFY18). We are encouraged by the fact that the company has been able to keep the repayment rate stable. Another key highlight this quarter was the strong yield on loans, which increased 40bp sequentially to 11.9% due to NPL recoveries and re-pricing in LAP portfolio. As a result, spreads/margin were up 50bp YoY to 3.4%/4.8%....

We maintain BUY with a revised TP of Rs 804 (3.3x Mar-19E ABV of Rs 244). Repcos 1QFY18 net earnings fell short of our estimates owing to lower NII, as disbursements declined 17.5%, resulting in loan book growth of 0.7/13% QoQ/YoY. Also, asset quality deteriorated, with GNPAs slipping back to the demonetisation level of 4%, from 2.6% in 4QFY18.

Background: Repco Home Finance Limited (RHFL) is a low to medium ticket size home loan financing company predominately based in tier II / III cities of southern India. Promoted by the State-owned Repco Bank Ltd in 2000, RHFL presently has 125 branches and 32 satellite centers of which ~87% are located in the southern market. Repco has shown robust growth in its loan book clocking 26% CAGR (FY13-FY17) and stood at INR ~90bn at the end 1QFY18. RHFL average loan per unit is...

Loan growth at multi-year lows but outlook stays positive: REPCO'S loan book recorded slowest growth since inception, expanding at ~16%YoY in FY17. The slow growth was a result of temporary disruption caused by a combination of socio-economic and legal factors which affected REPCO's target consumer segment. However, with overall scenario rapidly normalizing and government offering upfront incentives for affordable home buyers, REPCO management believes it can touch 20%YoY growth in FY18E....

Background: Repco Home Finance Limited (RHFL) is a low to medium ticket size home loan financing company predominately based in tier II / III cities of southern India. Promoted by the State-owned Repco Bank Ltd in 2000, RHFL presently has 125 branches and 32 satellite centers of which ~87% are located in the southern market. Repco has shown robust growth in its loan book clocking 26% CAGR (FY13-FY17) and stood at INR ~89.4bn at the end 4QFY17. RHFL average loan per unit...

Background: Repco Home Finance Limited (RHFL) is a low to medium ticket size home loan financing company predominately based in tier II / III cities of southern India. Promoted by the State-owned Repco Bank Ltd in 2000, RHFL presently has 121 branches and 32 satellite centers of which ~87% are located in the southern market. Repco has shown robust growth in its loan book clocking 29% CAGR (FY12-FY16) and stood at INR ~86.6bn at the end 3QFY17. RHFL average loan per unit is...

Repco Home Finance is a niche player in the small-ticket housing finance market (median Rs 0.8 mn). It focusses on underserved markets, especially the self-employed in Tier II and III cities. Factors like low mortgage penetration, government?s impetus for Housing for All and incentives for affordable housing bode well for Repco.

REPCO Home Finance is a midsized Housing Finance Company (HFC), with focus on the underserved self-employed segment. While the current operations of the company are predominately concentrated in Southern market (90%), the management intends to gradually venture into other geographies over the next 5 years. The target segment of REPCO is h..

Background: Repco Home Finance Limited (RHFL) is a low to medium ticket size home loan financing company predominately based in tier II / III cities of southern India. Promoted by the State-owned Repco Bank Ltd in 2000, RHFL presently has 121 branches and 32 satellite centers of which ~87% are located in the southern market. Repco has shown robust growth in its loan book clocking 29% CAGR (FY12-FY16) and stood at INR ~86.6bn at the end 3QFY17. RHFL average loan per unit...