Buy Repco Home Finance; target of Rs 500: Motilal Oswal
Motilal Oswal’s research report on Repco Home Finance
4QFY19 PAT grew 58% YoY to INR515m (10% miss), driven by modest loan growth, spread compression and lower credit costs (-INR24m v/s INR400m YoY). The miss v/s our estimates was driven primarily by lower NII, which the company attributed to fee income reversal of INR160m, driven by higher ECL provisions (150bp v/s 80bp earlier).
Maintain Buy with TP of INR500 (1.5x FY21E BVPS). We have not currently factored in the value of investment in the associate in our TP.
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