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Repco Home Fin.: Income and Earnings Maintain the Growth Tempo - Views on News from Equitymaster
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  • Feb 14, 2017 - Repco Home Fin.: Income and Earnings Maintain the Growth Tempo

Repco Home Fin.: Income and Earnings Maintain the Growth Tempo
Feb 14, 2017

Repco Home Finance (RHFL) announced its results for the third quarter (3QFY17) of the financial year 2016-17. The institution grew its income from operations by healthy 17% YoY and the profits by robust 20% YoY during 3QFY17. Here is the detailed analysis of the results.

Performance Summary
  • Interest income grew by 17% YoY in 3QFY17 even as disbursements were down by 16% YoY during the quarter. For 9MFY17, interest income was up 20% on the back of 1% increase in disbursements. The loan book grew by 21% YoY during the period.
  • NIMs contracted by 0.3% to 4.2% in 3QFY17 due to sharper fall in the yield on assets. For 9mFY17, NIMs reduced slightly to 4.3%. The non-salaried portion of the loan book remained capped at 60% during this period.
  • Operating expenses grew at a controlled 1.9% YoY during 3QFY17 on a modest 9% rise in employee benefit expenses and 8% reduction in other expenses. During 9mFY17, the operating expense was down 2.9% YoY. The cost-to-income ratio fell down to 16% in 9mFY17 as compared to 20% in 9mFY16.
  • The gross bad loans ratio has risen to 2.6% at the end of 3QFY17 as compared to 2.3% at the end of 3QFY16 and 2.4% in the preceding quarter 2QFY17. The asset quality of Loan against Property (LAP) loans has seen a marked decline during the quarter.
  • Provisions grew by a modest 4.3% in 3QFY16. The provision coverage ratio (PCR) improved to 44% in 3QFY17 as compared to 41% in 3QFY16. Net profit increased by 20% YoY during the quarter. For 9mFY17, profits were up by 22%YoY.

    Financial Performance Snapshot
    Rs (m) 3QFY16 3QFY17 Change 9mFY16 9mFY17 Change
    Income from operations 2,254 2,642 17.2% 6,411 7,707 20.2%
    Interest Expense 1,411 1,682 19.2% 4,027 4,828 19.9%
    Net Interest Income 842 961 14.0% 2,384 2,878 20.7%
    Net interest margin (%) 4.5% 4.2% 4.4% 4.3%
    Other Income 1 13 1575.0% 9 16 75.6%
    Other Expense 160 163 1.9% 490 475 -2.9%
    Provisions and contingencies 92 96 4.3% 252 403 59.6%
    Profit before tax 591 714 21.0% 1,651 2,016 22.1%
    Tax 205 250 22.1% 572 700 22.2%
    Profit after tax/ (loss) 386 464 20.4% 1,079 1,317 22.1%
    Net profit margin (%) 17.1% 17.6% 16.8% 17.1%
    No. of shares (m) 62.6
    Book value per share (Rs) 165.6
    P/BV (x)* 4.0

    * Calculated Book value as on 31st Dec 2016

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