Repco Home Finance Limited Q1 FY23 Earnings Conference Call Insights

Key highlights from Repco Home Finance Limited (REPCOHOME) Q1 FY23 Earnings Concall

Q&A Highlights:

• Akash Jain of MoneyCurve asked about the slippages in 1Q23. K Swaminathan MD replied that 1Q23 slippage was INR104 crores and recovery was INR165 crores. A small amount of the slippage is coming from the restructure book, about INR15-20 crore.

• Sarvesh Gupta with Maximal Capital asked about the updated guidance on FY23 end loan book. K Swaminathan MD said that the company expects a growth of 10-11% in the loan book. REPCOHOME added that it will maintain the INR13,000 crore loan book by FY23.

• Sarvesh Gupta with Maximal Capital enquired if the INR80-100 crore credit cost guidance includes the floating provisions created of about INR20 crores. K Swaminathan MD clarified that the credit cost does include the floating provision of INR20 crore.

• Sarvesh Gupta with Maximal Capital asked about employee cost fluctuating and any initiatives to control it. K Swaminathan MD replied that the company has budgeted for an increase in employee cost and overall it might increase due to salary revision. However, the increased anticipated income is expected to mitigate the increased employee cost.

• Sarvesh Gupta with Maximal Capital asked that on the liability side, if there is any initiative like increase in NHB exposure to help retain the spreads that were there last year. K Swaminathan MD replied that the company takes a commercial call and even today NHB is also increasing rate due to repo rate increases.

• Amish Thakkar from Siguler Guff asked about reason for yields decline on a sequential basis and outlook for margins and spreads. K Swaminathan MD clarified that yield has come down due to repricing, penalty income reducing, and absence of repo linked loans resulting in reduction in interest income.

• Amish Thakkar from Siguler Guff asked about the quantum of standard restructured book as of June 2022. K Swaminathan MD replied that the restructured book originally was INR700 crores and it has reduced.

• Amish Thakkar from Siguler Guff asked about the aspiration in terms of ROA and ROE on a steady state basis for the company. K Swaminathan MD answered that ROE is 2.1% and ROE is 11.9% currently and the aspiration is to maintain it going forward.

• Rishikesh Oza of RoboCapital asked about the loan book growth and branch growth guidance for FY23. K Swaminathan MD said the company has given a projection of 10-11% and a loan book of INR13,000 crores. On branch growth, the company said it has started the process and in 3Q23 some numbers could be given.