REPCO HOME FINANCE Research Report By Edelweiss

Repco Home Finance (RHF) earnings growth (considering pretax as FY15 has deferred tax provisioning hit) optically seems lower at 21% YoY when compared with the 26% run‐rate during 9mFY15. However, this was primarily owing to prudent stance of increasing provisioning coverage to 60% plus and higher employee cost. Operationally, business metrics and asset quality performance continued to impress. Key highlights: 1) after the Q3FY15 blip, disbursements gained traction (up >45% YoY) resulting in 29% loan growth (9% QoQ); 2) GNPLs dropped by >60bps to 1.3% (seasonal in nature); and 3) NIMs maintained the robust 4.5% mark. The potential to grow manifolds in under‐served markets, further drawing support from adequate CAR of 20%, will sustain RHF’s loan CAGR of 25% plus and help it post impressive 27% plus earnings CAGR, 2.4% RoA and 19% RoE over FY15‐17E. Maintain ‘BUY’.

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