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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