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Motilal Oswal Report
Repco Home Finance Ltd.’s Q1 FY21 profit after tax was largely flat YoY at Rs 640 million.
The quarter was characterized by muted business volumes, spread compression, and a focus on non-performing loan (NPL) collections.
The company took Rs 220 million provisions in the quarter, roughly half of that in the prior quarter, but up 3 times YoY.
As anticipated, disbursements were at 30% of run-rate levels in Q1 FY21 and have picked up to 50-60% in Q2 FY21.
However, as repayments were low due to moratorium and on account of capitalized interest, the loan book grew 1% QoQ / 6% YoY to Rs 120 billion.
Yield declined approximately 50 basis point QoQ and YoY to 11.3%, while cost of funds was stable on a sequential basis at 8.3%.
While spreads have compressed sequentially to 3%, they are largely in line with their long-term history.
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