Repco Home Finance (REPCOHOME) Q4 13/14 earnings summary

Executive summary

• FY14 loan sanctions rose 41.85% to Rs 1,822.52 crore, disbursements rose 46.93% to Rs 1,715.26 crore, and the loan book expanded 31.51% to Rs 4,661.86 crore.

• Total income reached Rs 535.34 crore and PAT increased 37.59% to Rs 110.10 crore; EPS was Rs 17.71 basic and Rs 17.64 diluted.

• Growth was supported by a 122-location network focused on Tier 2 and Tier 3 markets; gross NPA was 1.47% and net NPA improved to 0.72%.

Financial highlights

• FY14 total income was Rs 535.34 crore vs Rs 405.86 crore; PBT was Rs 149.13 crore vs Rs 106.80 crore, and PAT was Rs 110.10 crore vs Rs 80.02 crore.

• Net interest income increased 52% YoY to Rs 190.84 crore; average loan yield was 12.6% vs 12.3% and average borrowing cost was 9.3% vs 9.6%.

• Revenue from operations was Rs 534.15 crore; interest and other financial charges were Rs 324.75 crore, while total expenses were Rs 386.21 crore.

• Loan sanctions were Rs 1,822.52 crore and disbursements Rs 1,715.26 crore; average ticket size increased to Rs 0.11 crore from Rs 0.10 crore.

Outlook and guidance

• Planned calibrated expansion of 15–20 branches annually, with two-thirds in southern India and one-third in other states; expansion to remain contiguous and target underpenetrated markets.

• Priorities include funding diversification, borrowing-cost management, operating-cost control, asset-quality improvement, maintaining margins and returns, and reaching 100% provision coverage over a reasonable period.

• Advertising and brand-building were expected to support customer-base expansion in subsequent quarters; NCD and commercial-paper markets were identified as potential funding channels.