Repco Home Finance
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
REPCO IN
63
18.5 / 0.2
319 / 91
8/90/-27
75
62.9
17 February 2021
3QFY21 Results Update | Sector: Financials
CMP: INR296
TP: INR430 (+45%)
Stable quarter; asset quality surprises positively
Buy
Financials & Valuations (INR b)
Y/E March
2020 2021E
NII
4.9
5.7
PPP
4.2
4.8
PAT
2.8
3.1
EPS (INR)
44.8
49.7
EPS Gr. (%)
19
11
BV/Sh. (INR)
286
332
Ratios
NIM (%)
4.4
4.8
C/I ratio (%)
20.2
18.5
RoAA (%)
2.4
2.5
RoE (%)
16.9
16.1
Payout (%)
7.0
7.0
Valuation
P/E (x)
6.6
6.0
P/BV (x)
1.0
0.9
Div. Yield (%)
0.9
1.0
Shareholding pattern (%)
As On
Dec-20 Sep-20
Promoter
37.1
37.1
DII
20.1
20.2
FII
19.8
19.1
Others
23.0
23.6
FII Includes depository receipts
Repco Home Finance (REPCO)’s PAT grew 14% YoY to INR796m in 3QFY21,
8% above our estimates. The PAT beat was driven by an NII beat,
marginally offset by slightly higher provisions. The quarter gone by was
characterized by a recovery in disbursements, improvement in margin,
and maintenance of asset quality.
From 65–70% of YoY levels in 2QFY21,
disbursements improved to ~85%
of YoY levels to INR5.5b in the quarter.
The share of Home loans in total
disbursements improved 250bp YoY to 80%.
As repayment rates normalized since this was the first full quarter after
the lifting of the moratorium on term loan EMIs, loan growth remained
tepid (flat QoQ, +4% YoY).
The loan mix in terms of customer profession
as well as type of loans (Home/LAP) remains largely stable.
Despite a downward trend in Home loan rates across the industry, yields
increased 20bp QoQ to 11.8%. This, combined with a 30bp decline in the
cost of funds (CoF) to 7.9%, led to record high spreads of 3.9%.
On the borrowings side, REPCO paid down all its market liabilities (NCDs
and CPs) and continues to increase its dependence on NHB borrowings as
they come at a very low rate (6.1%). Over the past year, the share of NHB
borrowings has risen to 17% from 9%.
Contrary to our expectation of asset quality worsening, given the lifting
of the moratorium on term loan EMIs, pro forma GNPL ratio actually
came in flat QoQ at 4%.
In addition, restructured loans amounted to only
0.3% of total loans – better than that reported by most HFCs.
The total provision buffer increased 20bp QoQ/70bp YoY to 2.2%.
With business and collections largely reverting to normal, opex grew 13%
QoQ. Nevertheless, the C/I ratio is healthy at 18.5%.
Growth has slowed down as banks have become aggressive in lending.
Stage 2 loans stood at 7%. GNPL ratio will not cross 4.5% in 4QFY21.
2022E
5.7
4.8
3.2
51.3
3
380
4.6
19.7
2.5
14.4
7.0
5.8
0.8
1.0
Disbursements recover, but loan growth muted; margin surprises
Dec-19
37.1
24.8
28.8
9.3
Stable GNPL ratio a positive surprise
Highlights from the management commentary
Valuation and view
Since the IL&FS crisis, REPCO reduced its dependence on capital market
borrowings to nil at present from 20% earlier. It proactively increased its low-
cost NHB borrowings at the same time, thus maintaining margin. The
management has laid great emphasis on controlling asset quality. While it is
still early days, it seems that the impact of the crisis on asset quality is likely to
be minimal. Credit costs should normalize to 30-40bp in FY22E. However,
growth still remains elusive. While we forecast a pick-up, we expect the
company to deliver only 8% loan book growth over FY21-23E. We increase our
FY22E/FY23E EPS estimate by 2-4% to factor in higher margin. Maintain Buy
with a TP of INR430 per share (1x FY23E BVPS).
Research Analyst: Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com) |
Piran Engineer
(Piran.Engineer@MotilalOswal.com)
Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com)|
Divya Maheshwari
(Divya.Maheshwari@Motilaloswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
14 January 2020
1
 Motilal Oswal Financial Services
Repco Home Finance
Quarterly performance
Y/E March
Interest Income
Interest Expenses
Net Income
YoY Growth (%)
Other income
Total Income
YoY Growth (%)
Operating Expenses
YoY Growth (%)
Operating Profit
YoY Growth (%)
Provisions
Profit before Tax
Tax Provisions
Profit after tax
YoY Growth (%)
Loan growth (%)
Cost-to-Income Ratio (%)
Tax Rate (%)
Key Parameters (%)
Yield on loans (Cal.)
Cost of funds (Cal.)
Spreads (Cal.)
NIMs (Reported)
Credit Cost
Cost-to-Income Ratio
Tax Rate
Balance Sheet
AUM (INR b)
Change YoY (%)
AUM Mix (%)
Non-Salaried
Salaried
AUM Mix (%)
Home loans
LAP
Disbursements (INR b)
Change YoY (%)
Borrowings (INR b)
Change YoY (%)
Loans/Borrowings (%)
Borrowings Mix (%)
Banks
NHB
Repco Bank
NCD
CP
Asset Quality
GS 3 (INR b)
Gross Stage 3 (% on Assets)
NS 3 (INR b)
Net Stage 3 (% on Assets)
PCR (%)
Return Ratios (%)
RoA (Rep.)
RoE (Rep.)
E: MOFSL estimates
INR m
3Q
3,568
2,024
1,544
17.1
30
1,574
19.0
292
6.3
1,282
22.3
222
1,061
265
796
14.2
3.7
18.5
24.9
11.8
7.9
3.9
5.1
0.7
18.5
24.9
121
3.7
51.5
48.5
81.2
18.8
5.5
-15.9
102.7
4.9
117.4
73.2
17.1
9.7
0.0
0.0
4.0
3.3
2.2
1.9
44.3
2.6
17.3
4QE
3,451
2,007
1,444
4.7
121
1,566
11.9
299
-2.4
1,266
15.9
113
1,153
289
865
81.2
2.8
19.1
25.1
FY20
13,174
8,250
4,924
4.9
337
5,261
10.7
1,065
8.2
4,196
11.4
594
3,602
798
2,804
19.5
6.9
20.2
22.2
FY21E
13,889
8,225
5,664
15.0
202
5,867
11.5
1,083
1.7
4,784
14.0
628
4,156
1,047
3,109
10.9
4.9
18.5
25.2
1Q
3,286
2,015
1,271
11.2
-2
1,270
6.8
235
7.3
1,035
6.7
75
960
336
624
2.4
12.6
18.5
35.0
11.7
8.6
3.2
4.5
0.3
18.5
35.0
113
12.6
54.2
45.8
81.5
18.5
6.7
-5.2
95.6
14.8
118.7
70.9
10.9
7.9
8.7
1.6
4.8
4.2
3.3
3.0
30.5
2.2
17.7
FY20
2Q
3,322
2,085
1,237
3.4
33
1,270
5.4
249
5.7
1,021
5.3
1
1,020
14
1,006
51.1
10.7
19.6
1.3
11.6
8.5
3.1
4.3
0.0
19.6
1.3
115
10.7
53.4
46.6
81.5
18.5
7.0
-9.6
100.3
15.1
114.6
74.5
10.1
7.9
7.5
0.0
4.9
4.2
3.5
3.1
28.2
3.5
26.1
3Q
3,406
2,088
1,318
10.8
4
1,322
11.0
274
8.5
1,048
11.6
115
933
236
697
25.3
9.0
20.7
25.3
11.8
8.4
3.4
4.6
0.4
20.7
25.3
116
9.0
52.8
47.2
81.4
18.6
6.6
-10.6
97.9
9.7
118.8
75.9
9.4
8.0
6.7
0.0
4.9
4.2
3.5
3.1
28.6
2.4
17.3
4Q
3,441
2,062
1,379
18.5
20
1,399
19.9
307
10.8
1,093
22.7
403
690
213
477
-7.4
7.2
21.9
30.8
11.7
8.3
3.4
4.7
1.4
21.9
30.8
118
7.2
51.6
48.4
81.3
18.7
6.0
-31.4
100.6
8.4
117.6
75.2
7.8
10.5
6.5
0.0
5.1
4.3
3.3
2.8
35.8
1.6
11.5
1Q
3,384
2,104
1,280
0.7
35
1,315
3.6
235
0.1
1,080
4.4
221
859
219
640
2.6
5.6
17.9
25.5
11.4
8.3
3.0
4.3
0.7
17.9
25.5
120
5.6
51.7
48.3
81.3
18.7
1.8
-72.8
101.5
6.2
118.0
74.8
10.5
10.3
4.5
0.0
4.8
4.0
2.8
2.4
41.2
2.2
15.0
FY21
2Q
3,486
2,090
1,396
12.9
16
1,412
11.2
257
3.2
1,155
13.1
72
1,083
275
808
-19.7
5.2
18.2
25.4
11.6
8.2
3.4
4.6
0.2
18.2
25.4
121
5.2
51.7
48.3
81.1
18.9
4.7
-33.4
103.0
2.6
117.4
71.7
14.8
9.9
2.6
1.0
4.8
4.0
2.8
2.4
41.4
2.7
18.3
17 February 2021
2
 Motilal Oswal Financial Services
Repco Home Finance
Highlights from the management commentary
Business updates
Spreads in 3QFY21 were the highest ever due to: a) slower passing of the lower
CoF benefit to customers, and b) recoveries leading to interest write back.
Growth has slowed down as banks have become aggressive in lending. The
management said it will not compromise on profitability for growth.
The NBFC will open 10-12 branches annually.
The management is targeting a RoA of 2.25-2.5%.
It is targeting disbursements of INR7b in 4QFY21.
Incremental yields in 3QFY21: Home loans - 10%; LAP - 13.05%, total - 10.62%.
Asset quality
Stage 2 loans stood at 7%.
The management said GNPL ratio will not cross 4.5% in 4QFY21.
Funding
The NBFC has a liquidity of INR5b on its Balance Sheet.
The management is targeting spreads between 3% and 3.25% going forward.
Incremental NHB funding stood at 6.1% in 3QFY21.
Incremental CoF stood at 7.1% in the quarter gone by.
Others
Quarterly balance transfers on loans stands at INR3b.
Around 20-30% of REPCO’s book belongs to customers catered to by banks.
17 February 2021
3
 Motilal Oswal Financial Services
Repco Home Finance
Key exhibits
Exhibit 1: Disbursements recover closer to YoY levels…
Disbursements (INR b)
12
3
-5
-10
-11
-31
-73
7.3
8.8
6.7
7.0
6.6
6.0
1.8
4.7
5.5
-33
1.6
2.1
1.5
1.7
YoY Growth (%)
6.7
-16
5.7
5.2
5.3
5.1
4.6
4.4
Exhibit 2: …driven by Home loans and LAP
Home loans
LAP
3.7
1.0
1.5
1.4 1.5
0.3
1.1
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 3: Loan growth remains muted
Loan (INR b)
11
12
12
13
11
YoY Growth (%)
Exhibit 4: Share of key states in total AUM (%)
TN
3
26
7
6
5
14
4
58
57
57
56
56
56
56
56
56
3
27
14
3
27
14
KN
3
27
14
Next 5 states
3
27
14
3
27
14
3
27
14
Others
3
27
14
4
27
14
9
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 5: Home loan book share ~81%
Individual Home
18.4
18.4
18.5
18.5
18.6
18.7
LAP
18.7
18.9
18.8
Exhibit 6: Customer mix stable (%)
Non-salaried
Salaried
44.0 44.9 45.9 45.8 46.6 47.2 48.4 48.3 48.3 48.5
81.6
81.6
81.5
81.5
81.4
81.3
81.3
81.1
81.2
56.0 55.1 54.1 54.2 53.4 52.8 51.6 51.7 51.7 51.5
Source: MOFSL, Company
Source: MOFSL, Company
17 February 2021
4
 Motilal Oswal Financial Services
Repco Home Finance
Exhibit 7: Share of NCDs/CPs down to zero (%)
Banks
9
9
10
10
8
11
NHB
7
8
10
7
8
9
Repco Bank
6
11
8
4
10
10
NCDs/CP
-
4
10
10
17
15
Exhibit 8: NIMs cross 5%
4.8
4.5
4.5
4.5
4.6
4.7
5.1
4.3
4.6
4.3
4.3
73
71
75
76
75
75
72
73
Source: MOFSL, Company
Source: MOFSL, Company, Reported
Exhibit 9: PAT up 14% YoY
58
31
2
PAT (INR m)
51
25
-7
3
-20
YoY Growth (%)
Exhibit 10: RoE/RoA trend (%)
RoE
3.5
2.6
14
2.1
2.2
2.4
1.6
RoA
2.7
2.6
1.9
2.2
19.4 15.4 14.2 17.7 26.1 17.3 11.5 15.0 18.3 17.3
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 11: ECL at 2.2% (%)
GNPA
3.9
3.0
4.2
4.2
4.2
4.3
ECL
4.0
4.0
Exhibit 12: GNPL ratio of key segments (%)
HL GNPA
6.8
3.3
3.2
5.0
3.6
2.5
3.6
3.6
3.8
3.5
3.4
6.9
6.8
6.7
LAP GNPA
6.6
6.4
6.2
4.9
3.0
0.8
1.5
1.5
1.4
1.5
1.8
2.0
2.0
2.2
Source: MOFSL, Company; Note: GNPL ratio post SC order
Source: MOFSL, Company; Note: GNPL ratio post SC order
17 February 2021
5
 Motilal Oswal Financial Services
Repco Home Finance
Exhibit 13: We increase our FY22E/FY23E EPS estimate by 2-4% to factor in higher topline
INR b
NII
Other Income
Total Income
Operating Expenses
Operating Profit
Provisions
PBT
Tax
PAT
Loan book
NIM (%)
Spreads (%)
RoAA (%)
RoAE (%)
FY21E
5.4
0.2
5.6
1.1
4.5
0.6
3.9
1.0
2.9
124
4.5
3.4
2.4
15.2
Old estimate
FY22E
5.6
0.3
5.9
1.2
4.7
0.6
4.1
1.0
3.1
133
4.3
3.2
2.3
14.0
FY23E
6.2
0.3
6.5
1.3
5.2
0.6
4.6
1.2
3.4
148
4.4
3.2
2.4
13.7
New estimate
FY21E
FY22E
FY23E
5.7
5.7
6.2
0.2
0.3
0.3
5.9
6.0
6.5
1.1
1.2
1.3
4.8
4.8
5.2
0.6
0.5
0.5
4.2
4.3
4.6
1.0
1.1
1.2
3.1
3.2
3.5
122
129
142
4.8
4.6
4.5
3.7
3.5
3.4
2.5
2.5
2.5
16.1
14.4
13.7
FY21E
4.8
0.0
4.6
1.4
5.4
-2.9
6.7
6.7
6.7
-2.0
Change (%)
FY22E
2.8
0.0
2.7
1.5
3.0
-3.7
3.9
3.9
3.9
-3.0
FY23E
-0.1
0.0
-0.1
1.1
-0.4
-15.2
1.6
1.6
1.6
-3.9
Source: MOFSL, Company
Valuation matrix
Rating
66
HFCs
HDFC*
LICHF
PNBHF
AAVAS
CANFIN
REPCO
Vehicle
Finance
SHTF
MMFS
CIFC
Diversified
BAF
SCUF
LTFH
INDOSTAR
MAS
Gold Finance
MUTH
MGFL
Wholesale
PIEL
ABCL
Capital
Markets
IIFL Wealth
ISEC
FY23E
Buy
Buy
Neutral
Neutral
Buy
Buy
CMP
(INR)
2,804
470
432
2,254
507
296
Mcap
P/E (x)
P/BV (x)
RoA (%)
RoE (%)
(USDb) FY21E FY22E FY23E FY21E FY22E FY23E FY21E FY22E FY23E FY21E FY22E FY23E
67.6
3.3
0.9
2.4
0.9
0.2
29.9
7.8
6.9
63.7
14.4
6.4
23.1
7.0
6.1
51.9
14.0
6.0
17.1
6.5
4.9
40.6
12.6
5.4
3.4
1.2
0.8
7.4
2.6
0.9
2.7
1.0
0.7
6.5
2.2
0.8
2.1
0.9
0.7
5.6
1.9
0.7
1.8
1.4
1.4
3.3
2.2
2.4
1.9
1.4
1.5
3.4
2.1
2.3
1.9
1.3
1.8
3.8
2.1
2.4
12.5
16.1
12.6
12.4
19.9
15.2
12.4
15.7
12.8
13.4
17.2
14.0
13.1
14.9
14.2
14.8
16.4
13.7
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
1,460
219
528
5,704
1,479
98
322
848
1,323
177
1,887
104
4.6
1.9
6.0
47.5
1.4
2.7
0.5
0.6
7.3
2.0
5.4
3.2
14.1
33.5
23.9
77.9
10.1
20.9
33.8
32.1
14.2
8.5
15.8
11.2
11.1
22.9
18.4
38.8
8.1
9.1
26.1
26.2
11.8
7.2
14.8
9.6
9.7
15.0
16.2
30.6
6.6
6.4
18.3
22.3
10.1
6.2
12.0
4.7
1.7
1.8
4.4
9.4
1.2
1.3
1.0
4.2
3.6
2.1
1.3
1.1
1.5
1.7
3.6
7.7
1.1
1.1
1.0
3.8
2.9
1.7
1.2
0.8
1.3
1.5
3.0
6.3
0.9
1.0
0.9
3.3
2.4
1.4
1.1
0.5
2.2
1.1
2.7
2.6
3.1
0.8
1.1
3.3
6.6
5.6
0.0
1.6
2.7
1.5
3.2
4.8
3.7
1.9
1.3
4.2
6.9
5.7
0.0
1.4
2.8
2.1
3.4
5.0
4.3
2.4
1.9
4.5
7.3
5.8
0.0
1.8
13.2
6.0
20.1
12.8
12.6
6.4
3.5
13.8
28.7
27.0
8.6
10.6
14.2
7.5
21.7
21.9
13.9
13.5
3.7
15.2
27.5
25.6
8.4
8.5
14.3
10.7
20.3
22.7
15.1
16.5
5.1
15.8
26.0
24.2
9.5
10.5
Buy
Buy
1,223
417
1.5
1.8
29.5
13.9
24.8
13.8
19.8
12.8
4.3
9.0
5.3
7.5
4.9
6.4
22.4
0.0
21.5
0.0
22.8
0.0
13.2
71.3
19.1
59.3
25.6
53.8
17 February 2021
6
 Motilal Oswal Financial Services
Repco Home Finance
Financials and valuations
Income Statement
Y/E March
Interest Income
Interest Expended
Net Interest Income
Change (%)
Other Operating Income
Net Income
Change (%)
Operating Expenses
Operating Income
Change (%)
Provisions/write offs
PBT
Tax
Tax Rate (%)
PAT
Change (%)
FY16
8,521
5,483
3,039
27.8
297
3,336
27.7
643
2,693
30.4
392
2,301
800
34.8
1,501
21.9
FY17
10,141
6,463
3,678
21.0
318
3,996
19.8
676
3,320
23.3
518
2,802
979
34.9
1,823
21.4
FY18
10,851
6,489
4,362
18.6
250
4,612
15.4
790
3,822
15.1
748
3,074
1,063
34.6
2,010
10.3
FY19
11,634
7,200
4,434
1.7
318
4,752
3.1
984
3,768
-1.4
170
3,598
1,252
34.8
2,346
16.7
FY20
13,174
8,250
4,924
11.0
337
5,261
10.7
1,065
4,196
11.4
594
3,602
798
22.2
2,804
19.5
FY21E
13,889
8,225
5,664
15.0
202
5,867
11.5
1,083
4,784
14.0
628
4,156
1,047
25.2
3,109
10.9
FY22E
13,646
7,920
5,727
1.1
283
6,010
2.4
1,185
4,825
0.9
537
4,288
1,081
25.2
3,207
3.2
(INR M)
FY23E
14,622
8,463
6,158
7.5
326
6,484
7.9
1,296
5,188
7.5
539
4,649
1,172
25.2
3,478
8.4
(INR M)
FY23E
626
26,355
26,980
1,19,212
8.8
1,377
1,47,569
1,41,919
10.1
488
15.0
431
4,732
1,47,569
Balance Sheet
Y/E March
Capital
Reserves and Surplus
Net Worth
Borrowings
Change (%)
Other liabilities
Total Liabilities
Loans
Change (%)
Investments
Change (%)
Net Fixed Assets
Other assets
Total Assets
E: MOFSL estimates
FY16
625
8,923
9,548
65,379
28.1
2,705
77,632
77,049
28.1
124
0.0
93
366
77,632
FY17
626
10,747
11,372
75,604
15.6
3,457
90,433
89,578
16.3
156
25.8
91
609
90,433
FY18
626
12,459
13,085
81,343
7.6
2,882
97,310
96,492
7.7
239
53.5
135
443
97,310
FY19
626
14,648
15,274
92,774
14.1
1,522
1,09,570
1,08,379
12.3
363
51.5
155
673
1,09,570
FY20
626
17,243
17,869
1,01,090
9.0
980
1,19,939
1,15,877
6.9
321
-11.5
372
3,369
1,19,939
FY21E
626
20,135
20,761
1,04,523
3.4
1,098
1,26,381
1,21,538
4.9
369
15.0
391
4,083
1,26,381
FY22E
626
23,119
23,745
1,09,525
4.8
1,230
1,34,500
1,28,853
6.0
424
15.0
410
4,812
1,34,500
17 February 2021
7
 Motilal Oswal Financial Services
Repco Home Finance
Financials and valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield on Loans
Avg. Cost of Borrowings
Interest Spread
Net Interest Margin
Profitability Ratios (%)
RoE
RoA
Int. Expended/Int. Earned
Other Inc./Net Income
Efficiency Ratios (%)
Op. Exps./Net Income
Empl. Cost/Op. Exps.
Asset Quality (%)
Gross NPAs
Gross NPAs to Adv.
Net NPAs
Net NPAs to Adv.
Valuation
Book Value (INR)
Price-to-BV (x)
EPS (INR)
EPS growth (YoY)
Price-to-earnings (x)
Dividend per share (INR)
Dividend yield (%)
E: MOFSL estimates
FY16
12.4
9.4
3.0
4.4
FY17
12.2
9.2
3.0
4.4
FY18
11.6
8.3
3.4
4.7
FY19
11.4
8.3
3.1
4.3
FY20
11.7
8.5
3.2
4.4
FY21E
11.7
8.0
3.7
4.8
FY22E
10.9
7.4
3.5
4.6
(%)
FY23E
10.8
7.4
3.4
4.5
17.0
2.2
64.3
8.9
17.4
2.2
63.7
8.0
16.4
2.1
59.8
5.4
16.5
2.3
61.9
6.7
16.9
2.4
62.6
6.4
16.1
2.5
59.2
3.5
14.4
2.5
58.0
4.7
13.7
2.5
57.9
5.0
19.3
63.7
16.9
63.8
17.1
62.6
20.7
59.5
20.2
62.4
18.5
66.2
19.7
66.6
20.0
67.0
1,009
1.3
368
0.5
2,328
2.6
1,227
1.4
2,827
2.9
1,255
1.3
3,258
3.0
1,507
1.4
5,117
4.3
2,988
2.6
5,696
4.6
2,968
2.4
6,912
5.2
3,682
2.9
6,912
4.7
3,209
2.3
152.7
24.0
21.6
1.8
181.8
29.1
21.4
2.0
209.2
32.1
10.3
2.2
244.1
37.5
16.7
2.3
285.6
1.0
44.8
19.5
6.6
2.7
0.9
331.9
0.9
49.7
10.9
6.0
3.0
1.0
379.6
0.8
51.3
3.2
5.8
3.1
1.0
431.3
0.7
55.6
8.4
5.3
3.3
1.1
17 February 2021
8
 Motilal Oswal Financial Services
Repco Home Finance
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30
days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations,
is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of
India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details
of
associate
entities
of
Motilal
Oswal
Financial
Services
Limited
are
available
on
the
website
at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell
the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in
some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware
that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
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This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report
is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to
professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer
or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First
Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising
from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of
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such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
17 February 2021
9
 Motilal Oswal Financial Services
Repco Home Finance
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific
recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there
might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
-
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
-
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
-
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider
demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not
considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research
analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be
altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOFSL. The report is
based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from
publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made
as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not
constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated to all the customers
simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or
in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be
used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal,
accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this
report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This
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an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
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options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied,
is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is
provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The
Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and
the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform
or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is
already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or
published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any
locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL to any registration or
licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose
possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be
liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not
to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses,
costs, damages,
expenses that may be suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai-
400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI:
ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration
No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond,
NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered
through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk
Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,
read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law
Tribunal, Mumbai Bench.
-
17 February 2021
10