Repco Home Finance Ltd

Rating Action

• ICRA reaffirmed ratings on LT term loan, NCD, and CP; LT loan increased to ₹5,000 crore.

LT Fund-Based Term Loan

• Amount ₹5,000 crore; Rating AA- (Stable).

Non-Convertible Debentures

• ₹500 crore; Rating AA- (Stable).

Commercial Paper

• ₹800 crore; Rating A1+.

Rating Agency

• ICRA Limited.

Outlook

• Outlook: Stable for AA- ratings.

Material Change Since Last Rating

• LT loan size increased from ₹3,000 crore to ₹5,000 crore.

Rationale

• Rationale not disclosed in the filing.

Financial Performance

• Sanctions Rs 938 Crores; Disbursements Rs 843 Crores (Q1 FY2027).
• Net interest income Rs 216 Crores; NIM 5.4%; spread 3.4%.
• Net profit Rs 114 Crores; ROE 12.7%; ROA 2.9%.
• Cost-to-income 26%; Credit cost 0.2%.
• NHB refinance Rs 600 Crores; Rs 106 Crores availed in Aug 2026.
• Cost of funds 8.3%; borrowing mix: 86% banking, 6.2% NHB, 4.8% Repco Bank.
• Branch network 242 branches; 32 satellite centres.
• Guidance reaffirmed: Rs 5,000 Crores disbursements; 13-14% AUM growth; NPA reduction Rs 40 Crores.
• Current quarter disbursement target Rs 1,200-1,250 Crores.

Asset Quality and Provisions

• GNPA end-Jun 2026: Rs 427 Crores; GNPA 2.7%.
• ECL cumulative provision: Rs 352 Crores; PCR ~54%.
• Stage 2: 7.2%; Stage 3: 54% of Stage 3 gross assets.
• NPA recovery improves but not enough to upgrade; recoveries in Stage 2 and Stage 3.
• June 2025 GNPA: Rs 485 Crores; March 2026 GNPA: Rs 405 Crores (implied trend).
• Target: reduce NPA by Rs 40 Crores in FY2027; Sep-end NPA ~Rs 400 Crores.

Operations and Growth Initiatives

• IT transformation completed; mobile apps rolled out; API links with Perfios, CERSAI, CIBIL.
• Verticalization: separate recoveries, NPA management, SARFAESI; separate sales vertical.
• New DSAs; enhanced connectors; sourcing channels; marginal channel realignment.
• Average housing loan rate around 10.5%; cost of funds about 8.3%.
• BT outs: retention schemes; some yield sacrifice to retain good customers.
• Non-TN geography focus: Andhra, Telangana, Karnataka; pipeline in Maharashtra, Rajasthan, Gujarat, MP.

Guidance and Outlook

• Disbursements guidance: Rs 5,000 Crores for FY2027; 13-14% AUM growth; Rs 40 Crores NPA reduction.
• Current quarter disbursement target: Rs 1,200-1,250 Crores.
• NPA target: end-Q2 2027 NPA around Rs 400 Crores (from Rs 427 Crores in Jun 2026).
• NHB refinance: Rs 600 Crores sanctioned; Rs 106 Crores availed; more to come.

Q&A Highlights

• June disbursements solid; July better; August expected higher; run-rate ~Rs 1,200-1,250 Crores this quarter.
• Cost of funds ~8.3%; average housing rate ~10.5%; management stressed risk-based pricing.
• Diversification: no current plan to diversify; HFC license restricts to housing loans.
• Encashment accounting: interest income booked on encashment date; practice in place for 3-4 quarters.
• BT outs: retention incentives introduced; trade-off of spreads to retain customers; focus on quality disbursements.

Meeting Details

• Date: 12 August 2026; time not disclosed.
• Type: earnings conference call; mode not specified.

Participants

• Company management participants expected (roles not specified).

Purpose

• Discuss the quarter ended 30 June 2026 financial results.

Additional Notes

• Audio recording of the earnings call available.
• Investor presentation available.

Business Overview

• RHFL is a housing finance company focusing on retail housing loans and home equity.
• Geographic footprint spans 12 states and 1 union territory with 210 branches.
• Expansion beyond the South and deeper regional reach are strategic priorities.
• Loans are retail-focused, with 100% of the book classified as retail.
• Housing loans comprise 70.8% and home equity 29.2% of the loan book.
• End-Jun 2026 loan book: Rs 15,990 crore; AUM Rs 15,880 crore.

Key Operational Highlights

• Q1 FY27 sanctions: Rs 938 crore; disbursements: Rs 843 crore.
• Total income: Rs 468 crore; PAT: Rs 114 crore.
• GNPA 2.7%, Stage-2 7.2% as of Q1 FY27.
• Loan book rose to Rs 15,990 crore, up from Rs 14,690 crore a year earlier.
• Employee strength was 1,571 as of 30-Jun-2026.
• Branch network includes 210 branches and 32 satellite centers.
• Borrowing profile: total Rs 12,078 crore; average cost 8.33%.
• Credit ratings: CARE AA-/Stable (Term Loan); ICRA AA-/Stable (Term Loan/NCD).
• CP ratings: CARE A1+; ICRA A1+.
• Outstanding shares: 6.26 crore.

Financial Performance

• Total income increased 3% YoY to Rs 468 crore in Q1 FY27.
• PAT stood at Rs 114 crore; ROA 2.9%; ROE 12.7%.
• NIM 5.4%; yield on assets 11.7%; cost of borrowings 8.3%; spread 3.4%.
• ECL provision total Rs 353 crore; Stage-3 Rs 233 crore.
• Stage-3 coverage 54.5%; Stage-1+2 share ~97% of AUM.
• ECL movement: gross Stage-3 Rs 427 crore; net Stage-3 Rs 194 crore.
• Loans to non-salaried 53.5% and salaried 46.5% of loan book.
• Housing loans 70.8% and home equity 29.2% of loan book.

Capital Structure & Liquidity

• Total borrowings Rs 12,078 crore; average cost 8.33%.
• Funding is diversified across NHB, commercial banks, Repco Bank, CP, PTC, and NCDs.
• Credit ratings: CARE AA-/Stable (Term Loan); ICRA AA-/Stable (Term Loan/NCD).
• CP ratings: CARE A1+; ICRA A1+.
• Outstanding shares: 6.26 crore.

Strategy & Outlook

• Geographic expansion beyond the South remains a key growth driver.
• Retail-focused loan portfolio with improving asset quality and risk management.
• Management emphasis on diversified funding and prudent capital allocation.

Risks & Mitigation

• GNPA uptick to 2.7% QoQ; Stage-3 coverage supports risk buffers.
• Stage-3 share at 2.7% of AUM; favorable Stage-1/2 mix lowers credit risk.
• ECL provisioning framework provides cushioning against potential asset quality shocks.

Governance

• Managing Director & CEO: T. Karunakaran.
• Board includes independent directors; no material governance changes disclosed.

Overview

• Board approves IND AS results for quarter ended June 30, 2026.

Loan book and mix

• Loan book stood at Rs 15,990 crores as of June 30, 2026.
• AUM was Rs 15,880 crores as of March 30, 2026.
• Non-salaried loans 53.5%, salaried 46.5%.
• Housing loans 70.8%, Home Equity 29.2%.

Asset quality

• GNPA Rs 427 crores as of 30 Jun 2026.
• NNPA Rs 194 crores as of 30 Jun 2026.
• GNPA ratio 2.7%, NNPA ratio 1.2%.
• Provisions for expected credit losses Rs 353 crores.

Performance: QI FY27 vs QI FY26

• Total income Rs 468 crores; up 6.1% YoY.
• Net interest income Rs 216 crores; up 10.2%.
• Net profit Rs 114 crores; vs Rs 108 crores.
• Loans sanctions Rs 938 crores; vs Rs 907 crores.

Performance: QI FY27 vs Q4 FY26

• Disbursements Rs 843 crores; vs Rs 1,186 crores.
• Total income Rs 468 crores; vs Rs 454 crores.
• Net interest income Rs 216 crores; vs Rs 207 crores.
• Net profit Rs 114 crores; vs Rs 129 crores.

Capital adequacy

• CRAR 36.13%; minimum regulatory requirement 15%.

Distribution network

• 210 branches and 32 satellite centers as of June 30, 2026.

Financial results approved

• Board approved unaudited standalone and consolidated results for quarter ended 30 June 2026.
• Audit Committee reviewed results; Board approved after limited review by statutory auditors.
• Results prepared in Ind AS; disclosures compliant with SEBI LODR Regulations 33 and 52.

Regulatory, compliance and auditor notes

• Auditors’ Emphasis of Matter on non-recognition of Deferred Tax Liability on Special Reserve.
• Deferred Tax Liability recognised until December 31, 2025 reversed in Q4 FY2025-26.
• Company complied with financial covenants; disclosures under Debenture Trust Deed noted.
• Security cover certificates submitted; disclosures under Regulation 52(4) and 54(3) included.
• Consolidated results include Repco Micro Finance Limited as associate; no standalone segment.

Governance and RTA details

• Compliance Officer Ankush Tiwari (qualified CS; Membership A38879) appointed 04-08-2021, for quarter ended 30 June 2026.
• RTA for debt: KFin Technologies Limited, appointment 02-09-2025; no cessation/change.

Dematerialisation/rematerialisation status

• RTA certifies dematerialisation/rematerialisation details were furnished to all stock exchanges.
• No explicit exceptions, delays, or non-compliance were noted.