Repco Home Finance - Slowly Turning Around; Improving Asset Quality Trend: Nirmal Bang
Home equity portfolio to support yields.
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Nirmal Bang Report
We hosted the management of Repco Home Finance Ltd. for our Financial Services Day. Key takeaways from the meeting are:
The management reiterated its guidance of achieving 20% disbursements growth in FY24 (annual run-rate of ~Rs 36 billion), translating into 12% assets under management growth (AUM of ~Rs 140 billion by FY24-end).
Verticalisation of processes to continue and all operations of the organisation to be digitised by FY24-end.
On the asset quality front, the management remains positive about further improvement and has guided for a reduction of Rs 1 billion in gross stage-III assets and credit cost of ~Rs 250 million in FY24.
We have made marginal changes to our estimates, mainly driven by lower credit cost in FY24/FY25 amid rapid run-down in the restructured portfolio.
We Maintain ' Accumulate' on Repco Home Finance with a target price of Rs 390, valuing it at 0.8 times September 2025E adjusted book value per share.
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