HDFC Securities: Repco Home Finance Reports A Mixed Bag Of Earnings
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HDFC Securities Report
Repco Home Finance Ltd.’s net interst income grew 13/7% YoY/QoQ and was 6.3% ahead of estimates in Q1 FY21.
While pre-provision operating profit grew 22.7/4.2%, profit after tax dipped 7.4/31.6% on account a sharp rise in provisions.
The asset under management (AUM) growth trend was seen slowing in earlier quarters, and has been exacerbated by Covid-19 to come in at 7.2/1.7%-the slowest ever.
Despite Repco’s small base, we project AUM growth at just approximately 4% over FY21-22E. We believe Covid-19 and intense competition from banks, as suggested by commentary, will limit growth.
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