REPCO home finance

(abhishekshete) #673

Does anyone think this is a screaming buy at current prices of Rs 370-400?

(Arun S G) #674

I do, but I am also hearing so many other screams oh, buy me, buy me! coming from tata motors, maruti, bajaj auto, CARE , etc that I am not sure whose scream is loudest. With much blood on the street some & of it my own, i am not sure whether to apply bandages to my own wounds first or attend to others bleeding on the street…:cry:

(abhishekshete) #675

I have been discouraged to buy Repco because of size and given competition in the housing finance market. I like the history and reputation that Repco has but when I compare them with GRUH, HDFC. I cant find any competitive advantages that will make them stand out in the long run. I was amazed to see that GRUH has same no of employees as Repco yet their loan disbursements in the same ticket size is 7 times that of Repco with better return on equity / return on asset ratios.

Other than that - I am accumulating CARE at these levels and further down below. :slight_smile:

(lastgenesis) #676

My concern on Repco is it is operating on pretty thin spreads (as per last concall spread on incremental loan book were around 2%, though it is higher on full book) and while it would be able to pass on increases, there is lesser margin for error. Also concerned about whether loan quality in newer markets is as good as the TN market, this may be an issue with a lot of the newer entrants.

On plus side, problems in TN which is 60%+ of loan should be getting sorted and with fall in price it seems quite reasonably priced but it doesn’t have any moat that would make it stand out in a volatile/falling market.

Disc- invested