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    Repco Home Finance Q1 FY27 earnings call

    REPCOHOME
    Financial Services·12 Aug 2026
    Management Summary

    Repco Home Finance reported a stable Q1 FY27 with AUM growing 8.9% YoY to Rs. 15,990 Crores and net profit increasing 5.56% YoY to Rs. 114 Crores. While GNPA saw a marginal QoQ increase to 2.7% due to temporary internal factors, management expects a reduction in Q2. The company is focused on aggressive disbursements, supported by NHB refinance, but anticipates slight spread compression.

    Highlights

    5

    • AUM grew 8.9% year-on-year to Rs. 15,990 Crores as of June 30, 2026.

    • Net Interest Income increased to Rs. 216 Crores in Q1 FY27, up 4.35% from Rs. 207 Crores in Q1 FY26.

    • Net Profit stood at Rs. 114 Crores, a 5.56% increase from Rs. 108 Crores in the previous year's Q1.

    • The cost-to-income ratio improved to approximately 26%, reflecting operational efficiency.

    • Secured Rs. 600 Crores in refinance support from National Housing Bank (NHB), with Rs. 106 Crores already availed in August.

    Concerns

    4

    • Gross NPA (GNPA) ratio marginally increased to 2.7% (Rs. 427 Crores) from 2.6% (Rs. 405 Crores) QoQ.

    • Disbursements in the June quarter were affected by internal transfers and promotions, though momentum has since recovered.

    • Spread may slightly compress by 10-12 basis points in the next quarter due to aggressive disbursement and customer retention efforts.

    • A spike in Balance Transfers (BT outs) was observed in the June quarter, requiring concessions to retain good customers.

    Key financials

    Single quarter

    17 metrics
    1. 01Sanctions₹938 Cr
    2. 02Disbursements₹843 Cr+1.7%YoY
    3. 03AUM₹15,990 Cr+8.9%YoY
    4. 04GNPA (Absolute)₹427 Cr+5.4%QoQ
    5. 05GNPA (%)2.7%+3.9%QoQ

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Debt

    Debt disclosed

    Cost 8.3%

    Liquidity

    Undrawn ₹494 crores

    Remaining Rs. 494 Crores from the NHB refinance facility will be utilized shortly as needed.

    Guidance & targets

    8
    CategoryTargetPriority
    Disbursements
    Total Disbursements
    ₹5,000 Crores
    		High
    Disbursements
    Current Quarter Disbursements
    ₹1,200 Crores to ₹1,250 Crores
    		High
    AUM
    AUM Growth
    13% to 14%
    		High
    Asset Quality
    NPA Reduction
    ₹40 Crores
    		High
    Asset Quality
    NPA Level
    Around ₹405 Crores
    		High
    Asset Quality
    NPA Level
    Less than 2%
    		High
    Branch Expansion
    New Branches
    12 to 13 branches
    		High
    Profitability
    Spread
    10 to 12 basis points reduction
    		Medium

    What to watch in Q2 FY27

    4

    GNPA reduction to target

    by September end (Q2 FY27)
    CurrentRs. 427 Crores (2.7%) as of June 30, 2026
    TargetAround Rs. 405 Crores (or March figure)

    Why it matters

    Management committed to reversing the marginal QoQ increase in GNPA by the end of Q2 FY27, which is crucial for asset quality perception.

    by September end, we want to bring down NPA level of Rs.425 Crores as end of June to around Rs.405 Crores.

    Risks & concerns

    3
    RiskSeverity

    Marginal increase in GNPA

    GNPA ratio increased marginally to 2.7% (Rs. 427 Crores) from 2.6% (Rs. 405 Crores) QoQ, attributed to temporary internal factors. — Management acknowledged

    medium

    Potential NIM/Spread compression

    Spread may slightly come down by 10-12 basis points in the next quarter due to aggressive disbursement strategy and efforts to retain good customers. — Management acknowledged

    medium

    Competition and Balance Transfers (BT outs)

    A spike in BT outs was observed in the June quarter, leading to concessions on interest rates to retain customers, impacting spreads. — Management acknowledged

    medium

    Q&A highlights

    8

    “Sir, we start from 8.75% and our average is 10.5% for housing loans... My set of target customer is not like PSU set kind of target customer. PSU set of customers is entirely salaried, pure salaried class customer. My set of target customer is not like that. They are working in unorganized sector. They are doing business. They will not have a sufficient income proof to show their cash flows and income, I am targeting those borrowers... the ultimate pricing depends on the profile of the customer on risk basis.”

    Management clarified that their higher interest rates are justified by their target segment of unorganized sector borrowers with higher risk profiles, distinguishing them from PSU banks.

    asked by Gurumurthy T

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance and AUM Growth

    Repco Home Finance reported sanctions of Rs. 938 Crores and disbursements of Rs. 843 Crores in Q1 FY27, showing a 1.69% YoY growth in disbursements compared to Q1 FY26. The Asset Under Management (AUM) grew 8.9% year-on-year to reach Rs. 15,990 Crores as of June 30, 2026. Net Interest Income (NII) increased 4.35% YoY to Rs. 216 Crores, contributing to a Net Profit of Rs. 114 Crores, up 5.56% from the previous year's Q1. The company maintained a Net Interest Margin (NIM) of 5.4% and a spread of 3.4% for the quarter.

    02

    Asset Quality and Recovery Strategy

    The Gross NPA (GNPA) ratio saw a marginal QoQ increase to 2.7% (Rs. 427 Crores) from 2.6% (Rs. 405 Crores) in the previous quarter. Management attributed this to temporary disturbances from internal transfers and promotions, expecting a reduction to around Rs. 405 Crores by September end and less than 2% by March 2027. A structured approach to NPA management has been implemented, bifurcating NPAs into 'soft' and 'chronic' categories, with dedicated Regional Vertical Managers and vigorous legal actions under SARFAESI to drive recoveries.

    03

    Disbursement Momentum and Growth Outlook

    While Q1 FY27 disbursements were impacted by internal organizational changes, management confirmed that the momentum has recovered, with June, July, and early August disbursements being strong and on track. The company targets Rs. 1,200-1,250 Crores in disbursements for Q2 FY27 and maintains its FY27 guidance of Rs. 5,000 Crores in disbursements and 13-14% AUM growth. The focus is on aggressive growth without compromising asset quality.

    04

    Cost of Funds and NIM/Spread Management

    The average cost of funds for the company stood at 8.3% in Q1 FY27. The borrowing mix is diversified, with 86% from banking systems, 6.2% from NHB, and 4.8% from Repco Bank. The company secured Rs. 600 Crores in refinance from NHB, with Rs. 106 Crores already availed. While aggressive disbursement and customer retention efforts might lead to a slight spread compression of 10-12 basis points in the next quarter, the NHB refinance is expected to help stabilize the cost of funds.

    05

    Strategic Focus and Operational Enhancements

    Repco Home Finance remains solely focused on the housing finance business, particularly targeting the unorganized sector, which justifies its higher interest rates compared to PSU banks. Significant IT transformation has been completed, including mobile application rollouts and API integrations, to improve turnaround times. Organizational verticalization has been implemented, creating specialized teams for marketing, sourcing, recoveries, and NPA management, aiming to enhance efficiency and drive future growth.

    06

    Geographic Expansion and Branch Network

    The company operates 242 branches, including 32 satellite centers, and plans to open another 12-13 branches in the current financial year, with a focus on non-Tamil Nadu states like Andhra Pradesh, Telangana, and Karnataka. Efforts are also underway to strengthen presence in Maharashtra, Rajasthan, Gujarat, and Madhya Pradesh, aiming for considerable traction and growth in these regions by the end of the current and next financial year.

    This is an AI-generated summary of a publicly available earnings call transcript.