REPCO home finance

Motilal Oswal picked up a nice stake looks like - more than 1% in their latest shareholder report.

MOTILAL OSWAL MOST FOCUSED MIDCAP 30 FUND 1 922551 9,22,551 1.47 0.00 9,22,551

Source: Shareholder Report Shareholding Pattern Public ShareHolder

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Q1 results on August 06, 2016

Repco Home Finance Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on Saturday, August 06, 2016, inter alia, to consider and take on record/approve the un-audited financial results of the Company for the quarter ended June 30, 2016 (Q1), subject to a limited review by the Statutory Auditor.

Further, the Trading Window for dealing in the securities of the Company which had been closed on July 04, 2016, shall continue to remain closed till August 08, 2016, for the Company’s Directors/Officers and designated employees as per the Company’s Code of Conduct in terms of SEBI (Prohibition of Insider Trading) Regulations, 2015.

http://www.bseindia.com/corporates/anndet_new.aspx?newsid=b3649da9-8a39-4feb-8816-4689303cfb07

Repco Hiring Recruitment - Expansion plans in the horizon?

Repco Home Finance Hiring CLERICAL CADRE,ASSISTANT MANAGER AND MANAGER FOR VARIOUS LOCATIONS-Last Date:Aug 22,2016

http://technicalsymposium.com/Job_2016_New_govt_Aug_1.html

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Q1 results are out

The gross NPAs of the Company as on June 30, 2016 are Rs.176.95 crore (2.22% of the total
loans) as against Rs.140.59 crore (2.22% of the total loans) as on June 30, 2015. Net NPA of the
Company as on June 30, 2016 was 1.22% as against 1.29% in the corresponding period of the
previous year
PS - invested

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Looks like their Sanctions and Disbursements growth has slowed down as compared to YoY figures for previous quarters. This might be a concern.
NPA - Though increased as compared to Q4 2016, I think this is a general trend for Repco where it is higher in Q1.

Br,
Sudheendra

PS: Invested

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I would be happy tracking loan outstanding that is used in interest income. Other things can vary qoq as Repco uses cost efficient loan melas resulting in bump in particular quarter of the year. The PAT is slightly inflated due to lower employee expenses. Seems cost of employee stock options will hit Q2.

Disc: Invested

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Thanks Sumit. The loan growth number looked soft and stood out in an otherwise robust set of nos. Would be interesting to see what the management’s take is on business outlook. HFCs have a lot going for them, however so is the competitive intensity.

Loan outstanding has risen by 25% so don’t think there is anything to worry. They have raised low cost deposits (NCD etc) that should get deployed in Q2.

http://m.economictimes.com/markets/expert-view/20-growth-for-housing-finance-companies-is-sustainable-r-varadarajan-md-repco-home-finance/articleshow/53594521.cms?utm_source=twitterfeed&utm_medium=twitter

Management comments today.

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Came across this interesting report.

http://scroll.in/article/810138/a-tsunami-of-debt-is-building-up-in-tamil-nadu-and-no-one-knows-where-it-is-headed

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Management was sanguine about 25 pc growth at today’s analyst call. Seemed confident about the power and merits of their franchise offering.
Passing on cost reduction to customers and earning a reasonable spread was mentioned as core to strategy. Slowdown in loan sanction growth was attributed to base effect (50 pc growth in corresponding quarter last year) and the effect of elections in TN (which reduced property txs).
Management was equivocal on Npas being on lines of previous years and a better pcr than last year by March. Management also highlighted the difference in their offering and that of the micro finance sector and explained why default rates were low inn the mortgage segment. Exposure to farm sector they said was negligible.
Sanctions growth is a metric that will be tracked in ensuing quarters… Consistently lower numbers than the disbursement growth may point to a slowdown in the future.

Views invited from others who may have attended

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Repco continues to inspire trust on high quality sustainable growth. Adding to chulbul9’s points,

  1. Q1 Cost to Income ratio improved to 16.1%. This is a big improvement and Management said they should be able to maintain that.
  2. They have grown at 25% loan growth inspite of their main main market Tamil Nadu being weak due to elections. That means they will either grow higher going forward or should be able to easily achieve atleast 25% growth in loans. They still see Tamil Nadu as a big market going forward ~8 distrcits still to cover.
  3. They have now ~60% loans disbursed to Self-Employed, 40% to salaried - they will maintain this ratio going forward - For Self Employed loans, they charge atleast 1% higher rate compared to salaried. This along with LAP(20% of loans) will continue to ensure higher margins(4% plus) vs other HFC players.
  4. In Self employed, they lend mainly to retaill traders, they don’t lend to farmers who are NPA prone.
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Some additional info.

Slowdown in loan sanctions was due to elections. This was largely due to cash transaction being affected. It has picked up since then and would be alright on annual basis. They have not covered even TN completely. They plan to expand to remaining 8 districts. Further branch opening in other states to slow down. This is well though out strategy it seems.

LAP disbursement: average size is 11lac and median is 8lac.

Decline in funding costs is fully passed on to salaried segment due to rising competition. Some NBFCs are trying to lure existing customers of REPCO rather than attempting new loans.

No loans to farmers. 20% of non-salaried loans to professionals. x So salary + professionals = 52% of total borrowers

Branch manager personally checks credentials of the potential borrower for any other outstanding loans like microfin etc. 30% of customers do not have CIBIL records since they are first time borrower.

They remain confident of asset quality going forward. Interestingly they pointed out microfin phenomena as involving folks living beyond their means.

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Why did the elections lead to lower loan sanctions? Just trying to understand management statement.

Discl: Invested

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Most of their loans go to folks who buy land and build their own houses. Loan approvals happen only when land is bought and title is clear. TN elections are very cash intensive and hence the crackdown. Land transaction in rural areas still involve lots of cash transfer. Now you know the connection.

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PF money in housing…

Latest Annual Report for Repco 2015-16 released

https://karisma.karvy.com/images/2016/RHFL_Annual_Report_2015_16.pdf

Repco has raised 200cr by NCDs at 8.72%. This is much lower than 9.4% average cost of funds in FY16.

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@bharti_vishal…That’s good news.
DHFL NCD interest is higher side compare to Repco. Hence, cost of funds for DHFL is higher

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repco gives to individual small home buyers and dhfl major book is lap and builder loans