Detailed Narrative
Q1 FY26 Performance Overview
Repco Home Finance reported a strong Q1 FY26, achieving its highest ever quarterly disbursements and sanctions. Disbursements grew 21.9% YoY to ₹829 crores, while sanctions increased 24.8% YoY to ₹907 crores. The Assets Under Management (AUM) stood at ₹14,690 crores, reflecting a 7.2% YoY growth. Net profit saw a significant jump of 71.4% YoY to ₹180 crores, with ROA at 2.9% and ROE at 14%.
Asset Quality Improvement and Management
The company demonstrated substantial improvement in asset quality, with Gross NPA reducing to 3.3% of AUM at the end of Q1 FY26, down from 4.3% in June 2024. Net NPA stood at 1.19%. Stage 2 assets also saw a reduction of ₹175 crores YoY, settling at 9.7%. Management aims to further reduce GNPA to 2.5% and Stage 2 assets to 7-8% by year-end through enhanced collection verticals and special OTS schemes. The provision coverage ratio is maintained at 65%.
Funding and Borrowing Strategy
Repco Home Finance is actively diversifying its funding sources to manage costs better. The company successfully issued commercial paper amounting to ₹150 crores and availed a refinance facility of ₹58 crores after a three-year gap. Total outstanding borrowings stood at ₹11,074 crores, with a cost of funds at 8.7% as of June 2025. The current borrowing mix is 82% from banks, 8% from NHB, 8% from Repco Bank, and 1% from commercial paper. The company plans to raise around ₹500 crores from the NCD market before the financial year-end.
Operational and Technological Enhancements
The company has implemented several technological initiatives to improve efficiency and productivity. Upgraded core software systems, including loan origination, management, and collection systems, are fully operational. New mobile applications for sales, collections, and field investigations have been rolled out. Ongoing developments include a customer mobile application portal, associate system, and an assets and liability management system, contributing to measurable improvements in overall productivity.
Branch Network Expansion and Regional Focus
As of June 13, 2025, Repco Home Finance operates through 234 touch points across 12 states and one union territory, including 233 branches and 31 satellite centers. The company is expanding its presence in regions outside Tamil Nadu, with notable improvements in disbursements from Rajasthan, Gujarat, and Madhya Pradesh. Management plans to add 14 new branches and upgrade 12 SAT centers, aiming for a total of 247 touch points by year-end.
Capital Allocation and Shareholder Returns
The Board of Directors approved a 25% interim dividend for FY2025-2026, commemorating the company's 25 years of operations. This dividend reflects the company's commitment to delivering long-term value to shareholders. Additionally, the company is focusing on boosting employee morale through promotions, annual increments, and regular training programs, recognizing their contribution to growth.