Repco Home Finance Ltd (BOM:535322) (Q1 2027) Earnings Call Highlights: Asset Quality Improves, ...

August 13, 2026 - 08:15

Repco Home Finance Ltd reported a net profit of INR 114 crore for the first quarter of fiscal year 2027, marking a modest increase from the same period last year. The company's earnings call on Friday highlighted continued improvement in asset quality, with gross non-performing assets declining to their lowest level in several quarters. Management attributed the progress to tighter underwriting standards and a focused recovery effort in the affordable housing segment.

The lender saw steady disbursement growth, though executives acknowledged that competition in the home loan market remains intense, particularly from private banks and larger non-banking finance companies. This pressure has led to a slight compression in net interest margins, which the company expects to persist through the remainder of the fiscal year. The management guided for a spread compression of around 10 to 15 basis points over the next two quarters, citing rising cost of funds and competitive pricing on new loans.

On the operational front, Repco Home Finance reported a healthy loan book expansion, driven by demand in tier two and tier three cities. The company's focus on self-employed customers and the salaried segment in smaller towns continues to yield results, with average ticket sizes remaining stable. The management also noted that the collection efficiency has remained above 99 percent, and the provision coverage ratio stands at a comfortable level.

Looking ahead, the company plans to deepen its presence in existing markets rather than expanding aggressively into new geographies. The management expressed confidence in sustaining growth while keeping credit costs low, but remained cautious about the competitive landscape and its impact on yields. The stock reacted positively to the earnings release, closing slightly higher on the exchange.