REPCO home finance

Stock Opportunities Not-so-Hidden Gems
41

Stock Hit All Time High.

42

The fundamental trigger here will be access to low cost funds post the IPO.

Have been aggressively adding the stock. Somehow cant convince my self to buy Canfin, despite all the big names (Ayush, Hitesh Sir etc) suggesting it. More convinced and more research done on Repco.

43

Hi Vinod,

I too am not much aware about HFCs, i just stumbled on this topic and went thru annual reports of REPCO, GRUH, CanFIn etc and that reading only shaped my views. Problem in evaluating banks/HFCs/PFCs is that one can’t now whom they have loaned and how their borrowers are performing, hence performance of management becomes very important.

I think even after that, valuations play a big role. Investing @8 times of BV is risky but if there is clear case of outstanding growth, then it can make sense, FMCG biggies like HUL/NESTLE can’t be bought at low valuations ever, barring during market crashes like 2007-08. Read some more, me too doing the same and we will keep on discussing.

Thanks

Ashish

44

two imp observations

1)bank does not have cheque book facility

2)group is actively involved in micro finance

45

Happened exactly as you predicted… Hats off!!! I am a fan.

Where do you see it going now Technically??

Also can you please recommend some good book on technicals for beginners??

Regards.

46

Repco now is trailing at a PE of abt 20 and Gruh about 28.

Repco no longer looks undervalued to me.

47

technically repco is in a free zone now since it is at all time highs. So one cant predict upside targets since trading history is also very short.

Technical Analysis of Stock Trends’ by Edwards and Magee. is a book you can read for a grasp of basics in technicals.

http://www.flipkart.com/technical-analysis-stock-trends-0009/p/itmczyqxymmdeggz?pid=9780849337727&otracker=from-search&srno=t_2&q=magee&ref=4494c1d9-e2c5-40bb-9d27-81811f31a013 Link: http://www.flipkart.com/technical-analysis-stock-trends-0009/p/itmczyqxymmdeggz?pid=9780849337727&otracker=from-search&srno=t_2&q=magee&ref=4494c1d9-e2c5-40bb-9d27-81811f31a013

this is a link on flikpart which provides a list of technicals books available

48

Hi,

Have been reading about Repco advertisement for recruitment of employees for various branch offices in tier 2 and tier 3 cities of Gujarat in Ahmedabad Mirror and Ascent (Times of India)… The company seems to be entering/expanding in Gujarat.

Regards,

Ankit

49

Great Results.

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Repco_Home_Finance_Ltd_050813_Rst.pdf

50

Despite IPO funds availability this quarter, PAT has dipped!

1 Like
51

you are looking at comparing march 13 numbers with june 13 numbers.

try comparing june 12 with june 13 numbers.

they are fantastic.

52

Hi,

Agree with Hitesh, the nos are fantastic. The IPO money is put to good use as the disbursements grew by 80% yoy.

Housing Finance industry normally has a huge Q-4 and most of the time the Q-1 figures of next year will be far less than the just concluded Q-4.Canfin is an exception for this as its a kind of “turnaround” story in high growth momentum.

Repco is looking good with 25% CAR and high NIMs. This will churn out good returns for the next few years if gross NPA holds and decreases. Its NPA will reduce most likely this year as loan book growth will be very high (which is the denominator for NPA calculation) and new NPAs normally surface after some time only even if the credit appraisal was weak. All in all Repco is going to come out with good set of nos this year in all fronts.

But I still have doubts if this is a quality long term compounder.

Cheers

Vinod

53

I believe that once the cost of funds comes down (and if I am not wrong company is already in the process to get it done), there should be margin expansion - and a subsequent PE Rerating.

I am biased because I was able to buy it as 20% of my portfolio at 170 odd, and sold half at 292. Hold it as 10% of my portfolio still

54

I think looking at the q1 results, company can easily post eps in excess of 20 for fy 14… At cmp of around 250-260 this is available at around 12-13 times as compared to gruh’s 20 plus PE…

With the company flush with funds, and the kind of past track record of growth of 35% plus for many years, repco seems a likely candidate for rerating.

Company has put up a lot of details in its presentation which provides insights into its business.

55

I am planning to attend the AGM tomorrow. If anyone has questions, please post asap.

56

in view of short time available, here are some questions from top of my head

1). In Q1, the privisions have increased but still it is only at 32%. is there a plan to increase the provision coverage in due course ? if so can we get more details ?

2). Any update on the credit rating upgrade ? when we get this upgrade , how many basis points we get as benefit in our borrowings

3). we have around 67% floating interest rate borrowings. in view of the impending interest rate hikes, what would be the approximate burden on the NIM ?

4). our profile of customers is approximately 50:50 between salaried and non-salaried. is this profile going to change with more focus on non-salaried where the NIMs are better but with more risk

5). how is the power situation in TN , recently first phase of nuclear power plant is supposed to start. will this reduce the lumpiness of the NPAs to some extent ?

6). our NHB borrowings have come down compared to last year. any reason ? is the trend going to reverse soon ?

57

Hi Bala,

I can recall some of the answers from their Q1 call…

  1. Yes, they will try to increase provisions going forward.

  2. Rating is still the same.

  3. They want to maintain 50:50 ratio

1).

2).

3).

4).

5).

58

Most probably I will also attend.

Kindly post questions.

59

1)What will be the impact of today news item published in ET where NHB has placed a cap of interest of 10.75% on loans upto 4 lac rs to economically weaker section? Is it a major blow?

2)How has been the response of branches opened in non TN areas so far?

3)How is the power situation in TN & how is it impacting business for Repco in terms of NPA recovery from non salaried clients?

  1. What learning does it has from working of GRUH & has any of it been incorporated in Repco?

  2. How is the IT infrastructure at Repco?Is there any CBS If not isnt the business suffering?

  3. How is LAP being pursued & what %age of business it forms?What are the risks in LAP?

  4. Please give details of credit appraisal system at Repco & how minimal NPAS are ensured.

  5. Whats the expansion plan & is it being done in a hub n spoke model? Are they able to successfully replicate the protoype branch model to other places as they expand?

  6. Indian real estate prices are the highest in the world & ongoing slowdown affecting them?

  7. Are any loans being extended to builders which increases the risks to the co as 10 lac loan is the borrower problem & 10cr to 100 cr problem bank problem

  8. Lot of doubts are there on PSU work culture & tag impacting the co as its promoted by a govt owned bank.How is it being tackled? Is the impression that its works like a pvt sector bank more of a hype ?Any ESOP plan for staff? Why equivalent govt HFC like Canfin homes getting a low PE & REpco v high & is it sustainable?

60

1)What will be the impact of today news item published in ET where NHB has placed a cap of interest of 10.75% on loans upto 4 lac rs to economically weaker section? Is it a major blow?

2)How has been the response of branches opened in non TN areas so far?

3)How is the power situation in TN & how is it impacting business for Repco in terms of NPA recovery from non salaried clients?

  1. What learning does it has from working of GRUH & has any of it been incorporated in Repco?

  2. How is the IT infrastructure at Repco?Is there any CBS If not isnt the business suffering?

  3. How is LAP being pursued & what %age of business it forms?What are the risks in LAP?

  4. Please give details of credit appraisal system at Repco & how minimal NPAS are ensured.

  5. Whats the expansion plan & is it being done in a hub n spoke model? Are they able to successfully replicate the protoype branch model to other places as they expand?

  6. Indian real estate prices are the highest in the world & ongoing slowdown affecting them?

  7. Are any loans being extended to builders which increases the risks to the co as 10 lac loan is the borrower problem & 10cr to 100 cr problem bank problem

  8. Lot of doubts are there on PSU work culture & tag impacting the co as its promoted by a govt owned bank.How is it being tackled? Is the impression that its works like a pvt sector bank more of a hype ?Any ESOP plan for staff? Why equivalent govt HFC like Canfin homes getting a low PE & REpco v high & is it sustainable?

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