Repco Home Finance Limited

Repco Home Finance achieved its highest ever quarterly disbursement of ₹1,069 Crores in Q2 FY26, representing a significant 23.3% YoY and 28.9% QoQ growth. Sanctions also saw robust growth, reaching ₹1,206 Crores in the quarter. This strong performance contributed to an 8% YoY growth in the overall loan book, which stood at ₹15,033 Crores as of September 2025. The company is confident in achieving a ₹16,200 Crores AUM by the end of FY26, with further targets of ₹25,000 Crores by FY28.

The company demonstrated continued improvement in asset quality, with GNPA reducing to ₹475 Crores (3.16%) as of September 2025, down from ₹552 Crores a year prior. Net NPA also decreased to 1.50% (₹225 Crores). Stage Two assets saw a QoQ decline of 6.96% to ₹1,323 Crores. Repco Home Finance maintains a strong provision coverage ratio of 52.54% for stage three assets, affirming the adequacy of its provisioning framework. Management aims to further reduce GNPA to ₹450 Crores in the current quarter and achieve 2.5% by March 2026 through various recovery strategies.

For Q2 FY26, the company reported a Net Interest Margin (NIM) of 5.5% and a spread of 3.4%, with a yield of 12.1%. Net profit for the quarter was ₹107 Crores. Return on Assets (RoA) stood at 2.9% and Return on Equity (RoE) at 13.5%. The Cost to Income Ratio was efficient at 28.4%. Management expects a further reduction in the overall cost of funds by 10-15 bps over the next two quarters, driven by the re-pricing of approximately ₹6,000 Crores of bank borrowings.

Repco Home Finance has undertaken several strategic initiatives to drive growth and enhance operational efficiency. This includes realigning incentive policies, conducting promotions after 2.5 years, and expanding its branch network with plans to open 10-15 new branches this financial year. These investments, along with silver jubilee celebrations, led to a temporary increase in employee and other administrative costs. The company is also exploring book purchases as an add-on to organic growth, with a small acquisition of ₹30-40 Crores planned for the current financial year.

Despite the aggressive push for disbursement growth, management reiterated its strong commitment to maintaining underwriting quality. They highlighted significant improvements in underwriting standards over the past 4-6 quarters, resulting in a gross NPA of approximately 1.2% in the new loan book. A dedicated credit review cell has been established in the corporate office to scrutinize sanctions before disbursement, ensuring that growth is achieved with sustained quality and profitability.

Management acknowledged that AUM growth has not fully kept pace with the strong disbursement numbers, partly due to the rundown on the legacy book and a higher portfolio run-off rate, especially from non-housing loans which have shorter tenures. They stated that this is an ongoing challenge requiring them to 'run fast even to be in the same place.' However, they expressed confidence that AUM growth will accelerate as disbursements continue to increase, with a target of ₹16,200 Crores by FY26 end.