Buy Repco Home Finance; target of Rs 683: HDFC Securities

HDFC Securities' research report on Repco Home Finance

REPCO��s� 4Q� numbers� beat� estimates� given the claw back in asset quality (GNPAs� dipped ~20% QoQ). Though overall growth (+10% YoY) was sluggish, it was� largely� owing� to� (deliberately) tepid growth in LAP (up merely 2%).� Credit� costs� dipped� (60bps� ann.� vs.� 83bps� in 3Q) as REPCO wrote back provisions� of� Rs� 28mn.� NIMs� too� improved� 20bps QoQ to 4.8% as yields remained flat and COF dipped 30bps.

Outlook

We like REPCO for its steady (if slow) healing, 2%+� RoAAs� and the sizable addressable opportunity. Maintain BUY with a TP of Rs 683 (2.5x Mar-20 ABV of Rs 273).

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Read More First Published on May 31, 2018 04:35 pm