535322) (Q1 2027) Earnings Call Highlights: Asset Quality Improves, ...

Repco Home Finance Ltd (BOM:535322) (Q1 2027) Earnings Call Highlights: Asset Quality Improves, …

This article first appeared on GuruFocus.

Sanctions: INR 938 crore in Q1 FY27, up from INR 907 crore in Q1 FY26.
Disbursements: INR 843 crore in Q1 FY27, compared to INR 829 crore in Q1 FY26.
AUM: INR 15,990 crore as of June 30, 2026, reflecting 8.9% year-on-year growth.
Net Interest Income: INR 216 crore in Q1 FY27, up from INR 207 crore in Q1 FY26.
Net Interest Margin: 5.4% for the quarter, with a spread of 3.4%.
Net Profit: INR 114 crore in Q1 FY27, compared to INR 108 crore in Q1 FY26.
Gross NPA: INR 427 crore with a ratio of 2.7%, down from INR 485 crore a year ago.
Stage 2 Assets: 7.2% of the book, stable versus 7% in the previous quarter and improved from 9.7% a year ago.
ECL Provision: Cumulative provision of INR 352 crore as of June 30, 2026, with a PCR of 54%.
Cost of Funds: 8.3% for the quarter.
Cost-to-Income Ratio: Approximately 26% as of June.
ROE and ROA: 12.7% and 2.9%, respectively.
Branch Count: 242 branches, including 32 satellite centers, with plans to open 12-13 new branches in FY27.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Repco Home Finance Ltd (BOM:535322) reported a year-on-year improvement in asset quality, with gross NPA declining to 427 crores from 485 crores in the same period last year.
The company maintained a stable net interest margin (NIM) of 5.4% and a healthy spread of 3.4% for the quarter ended June 2026.
Net profit increased to 114 crores in Q1 FY27, up from 108 crores in Q1 FY26, reflecting improved profitability.
The company secured a 600 crore refinance facility from the National Housing Bank, which will help stabilize the cost of funds and support growth.
Management reaffirmed its full-year guidance of 5,000 crores in disbursements and 13-14% AUM growth, with July and August disbursements already tracking in line with expectations.
The company has implemented structural changes, including verticalization of operations and IT upgrades, which are expected to drive operational efficiency and future growth.

Q1 FY27 disbursements were flat year-on-year at 843 crores, impacted by routine branch transfers and employee promotions that disrupted operations.
Gross NPA ratio saw a slight sequential increase to 2.7% from 2.6% in the previous quarter, with absolute NPAs rising to 427 crores from 405 crores.
The company faces intense competition from banks offering lower home loan rates, leading to a spike in balance transfers (BT outs) during the quarter.
Management indicated that the spread may compress by 10-12 basis points in the coming quarters due to the need to offer concessions to retain customers and drive aggressive disbursement growth.
The company’s cost of funds remains relatively high at 8.3%, limiting its ability to compete on pricing with banks that have access to low-cost CASA deposits.
Stage two assets remained elevated at 7.2% of the book, and recoveries from NPA and stage two accounts are not yet sufficient to upgrade these assets to higher categories.