in these matters it is best to defer to the wisdom of management.
there is significant material difference between Gruh and Repco. While the former concentrates on Mumbai and Gujarat, the fastest growing markets in the country, the latter has its base in Tamil Nadu.
Also Repco, more than Gruh, concentrates on small ticket loans catering to self employed people. For this class of people income is lumpy and so are payments made by them. Naturally NPAs too tend fluctuate though it evens out over the long term.
The positive thing about Repco is the slightly higher rate of interest it charges borrowers since it has some kind of a monopoly in its market.
I presume once the economy begins booming, Repco will become aggressive in lending and thus increase leverage for this purpose.
disclosure: holding Repco in core portfolio and hence my views may be considered biased.
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