Repco Home Finance (Repco ) reported 3 Q FY 18 earnings of IN R 485 mn, up 5 % YoY. Loan growth moderated to 9.6% on account of i) Sand Mining ban in TN after Madras High Court’s order in Nov’17 ; i i ) sluggish LAP growth (flat YoY) with company focusing on low er ticket LAP iii) higher repayments due to increase in competition and iv) slower growth outside TN in Kerala, Karnataka and AP due to state specific issues.
Outlook
We expect REPCO to deliver ROA of 2.2% and ROE of 16 % by FY20E. We value REPCO at 2.4 x Mar ’ 20 BV, implying a Mar’19 TP of INR 690
source:-moneycontrol.
