REPCOHOME - Repco Home Finance Limited Share Price

Management at Repco Home Finance provided an optimistic outlook for the future, with several key targets and performance metrics highlighted during the Q3 FY2026 earnings call.

1. Disbursement Growth: For Q4 FY2026, management is targeting disbursements between Rs. 1,200 Crores to Rs. 1,400 Crores, leading to a total of around Rs. 4,000 Crores for the financial year. They set an ambitious goal of Rs. 5,000 Crores in disbursements for FY2027.

2. Assets Under Management (AUM): Management expects AUM to reach Rs. 16,200 Crores by the end of FY2026, marking a significant increase compared to the previous year.

3. NPA and Stage 2 Asset Reduction: The management reiterated their commitment to managing asset quality, targeting a gross NPA reduction to 2.5% and Stage 2 assets to 7.5% by the end of the fiscal year.

4. Cost of Funds: They expressed confidence in further reducing the cost of funds by an anticipated 10 basis points based on upcoming repricing of bank borrowings.

5. Credit Cost: They foresee continuing negative credit costs, with expectations of decreasing NPAs by Rs. 20-25 Crores in the upcoming quarter.

6. Branch Expansion: The company opened two new branches, bringing the total to 236, a move that supports their growth strategy.

7. Dividends: In a strategic decision, the board declared an interim dividend of 20%, totaling 45% for the financial year, signaling an approach that balances shareholder returns with growth.

This comprehensive strategy reflects management's intent to leverage operational improvements and market conditions for sustained growth.

Question 1: "Sir, quickly on the sanctions they have come off very sharply on a QOQ basis, but the disbursement remained largely similar, is it because of the unsanctioned disbursements last quarter that we were able to bridge the gap?"

Answer: Yes, we experienced a considerable reduction in sanctions, but disbursements remained consistent due to a backlog of unsanctioned loans from the previous quarter. This allowed us to maintain our disbursement figures despite falling sanctions.

Question 2: "How do we look at the competitive intensity in Tamil Nadu now that we have Aavas also opening branches there?"

Answer: The competition in Tamil Nadu has increased, but we have a 25-year presence and a robust network in the region, mitigating its impact. We'll focus on growing in other states to balance our exposure, aiming to increase disbursements outside Tamil Nadu.

Question 3: "How likely are we to meet the guidance on GNPA and AUM?"

Answer: We are on track to meet our guidance of disbursing Rs.4000 Crores and achieving Rs.16,200 Crores in AUM. I remain confident in our ability to bring down GNPA to 2.5% and Stage 2 assets to 7.5% by year-end.

Question 4: "What can we expect for credit costs and cost of funds for 2027?"

Answer: Presently, our credit cost is negative, and I project an NPA reduction of about Rs.20-25 Crores moving forward. As for cost of funds, we expect further drops, around 10 basis points, translating to continued positive financial momentum.

Question 5: "The other expenses have risen by 38%, what's the reason behind it?"

Answer: Our increased expenses tie to our Silver Jubilee celebrations, where we honored long-serving employees, plus the costs associated with higher sourcing activities like legal fees and evaluations linked to improving our disbursements.

Question 6: "Can we expect technology improvements for collections and origination?"

Answer: While we're integrating technology, our customer base includes many low-income individuals requiring personal interaction for risk assessment. For collections, we're developing technology-driven solutions alongside our in-house team to enhance efficiencies.