Repco home finance is a listed company.

1) Identify key P&L, Balance sheet items - drivers and ratios

2) Construct financial projections for the next 3 years and compute key ratios

3) Evaluate the drivers of business and let us know what you think about the company and its future prospects. Identify any ke
ure prospects. Identify any key strengths and areas of improvement.
 Historical performance
FY17 FY18 FY19 FY20
Growth
States + UTs (No.) 12 12 12 13
Avg. loan per unit (lakhs) 14 14 14 15
Branches + satellite centres (No.) 157 160 167 177
Employees (No.) 670 785 929 994

Loan book (INR Cr) 8940 9857 11037 11826

Loan book growth (%) 10% 12% 7%

Avg. loan book (INR Cr) 9398 10447 11431
Disbursements (INR Cr) 2642 2807 3092 2627

Yields and spreads

Yield on loan assets (%) 11.5% 11.1% 11.5%
Interest expense on loan assets (%) 6.9% 6.9% 7.2%
Avg. cost of funds (%) 8.4% 8.3% 8.5%
Spread vs cost of funds on loan assets (%) 3.1% 2.8% 3.0%
NIM (excl. loan-related income) (%) 4.6% 4.2% 4.3%

Operating efficiencies
Other loan-related income ratio 0.2% 0.2% 0.2%
Other income ratio 0.0% 0.1% 0.0%
Cost to income (NII) ratio 18.1% 22.2% 21.6%
Expense ratio 0.8% 0.9% 0.9%
Credit cost ratio 0.8% 0.2% 0.5%
AUM per employee (INR Cr.) 12.6 11.9 11.9

Asset quality and provisioning

Capital adequacy ratio (%) 20.8% 23.0% 23.9% 25.9%

GNPA (%) 2.6% 2.9% 3.0% 4.3%

NNPA (%) 1.4% 1.3% 1.4% 2.5%

Provision coverage ratio 46% 55% 53% 42%

Return Ratios
RoA 2.1% 2.2% 2.5%
RoE 16.3% 16.3% 16.6%
Payout ratio 7.5% 7.1% 6.7%
 Key measures Projections
FY17-19 CAGR FY17-20 CAGR Avg. FY17-20 FY21 FY22 FY23

2%
3% 4% 184 192 200
18% 14%

11% 10% 12583 13389 14247

12205 12986 13818

8%

11.4% 11.4% 11.4% 11.4%

7.0% 7.26% 7.31% 7.36%
8.4% 8.4% 8.4% 8.4%
3.0% 3.0% 3.0% 3.0%
4.4% 4.1% 4.1% 4.0%

0.2% 0.2% 0.2% 0.2%

0.0% 0.0% 0.0% 0.0%
20.6% 23.5% 23.7% 24.0%
0.9% 1.0% 1.0% 1.0%
0.5% 0.7% 0.7% 0.7%
12.1

24.3%

3.4% 4.6% 4.9% 4.9%

1.7% 2.3% 2.4% 2.4%

50.1% 50% 50% 50%

2.3% 2.1% 2.0% 2.0%

16.4% 13.1% 11.9% 11.1%
7.1% 6.7% 6.7% 6.7%
Projection rationale

NA
NA
Projected at FY17-20 CAGR
NA

Assumed to grow at sum of branch and avg. loan size growth: in line
with consensus analyst estimates. Slow down stemming from high
competition fro PSBs in key states and high rates of balance transfers
6%

Calculated from year ending loan book estimates

Retained at average of FY2018-20

Loan book will be incrementally funded at cost of borrowing
Retained at average of FY2018-20
Calculated as difference between yield and cost of funds
Calculated from IS in Tab 3: diff. b/w yield and interest expense on advances

Retained at average (% of AUM) of FY2018-20

Retained at average (% of AUM) of FY2018-20
Calculated from IS
Calculated from IS
Calculated from IS

In line with avg. historical increase and due to CV induced slowdown as 0.30%
per analysts due to high non-salaried customer mix
Calculated as difference of GNPA and provision coverage
Coverage ratio at average of FY18-20

Calculated from IS and BS projections

Calculated from IS and BS projections
Retained at FY20 levels
All figures in INR Cr Historical performance Projections
FY18 FY19 FY20 FY21
Interest Income 1085 1163 1317 1392
Interest expenses 649 720 825 886
NII 436 443 492 505

Other loan related income 22 26 28 30

Other income 3 6 6 6
Total other income 25 32 34 35

Total income 461 475 526 541

Employee Benefit Expenses 50 59 66 71

Dep, amortisation and impair. 3 5 13 13
Other expenses 26 35 27 34
Total operating expenses 79 98 106 119

PPOP 382 377 420 422

Provisions and contingencies 75 17 59 81

PBT 307 360 360 340

Tax provisions 106 125 80 85

PAT 201 235 281 255

Projections
FY22 FY23 Projection rationale
1481 1576 Yield on loan assets assumed to be average of FY18-20
949 1017 Interest expense % on loan assets from Tab 2
532 559

32 34 Retained at average % of AUM of FY2018-20

6 6 Retained at average % of AUM of FY2018-20
37 40

569 599

75 80 Growing at FY18-20 growth rate of ~16%, in line with FTE CAGR at 14%
14 15 Growing at rate of branch opening
37 39 Retained at average % of AUM of FY2018-20
126 134

443 465
92 98 Growing from average % of AUM of FY18-20 indexed to GNPAs

351 367
91 96 Retained at average % of AUM of FY20

260 270
`
All figures in INR Cr Historical performance
FY17 FY18 FY19 FY20
Equity
Equity 63 63 63 63
Other equity 1075 1263.4 1495 1768
Total equity 1137 1326 1557 1830

Liabilities
Financial liabilities
Securities 2134 876 680
Borrowings 6000 8473 9429
Other financial liabilities 247 17 46
Non financial liabilities
Provisions 13 12 16
Deferred tax 28 52 36
Total liabilities 8423 9430 10207

Total equity plus liabilities 9749 10987 12037

Assets
Financial assets
Cash and cash equivalents 26 58 324
Loans 9649 10838 11588
Other financial assets 8 10 10
Investment in associate 33 52 65
Non financial assets
PPE 12 14 14
Other intangible 1 2 2
RoU assets 0 0 21
Other non financial assets 19 14 13
Total assets 9749 10987 12037

Yes Yes Yes

 Projections
FY21 FY22 FY23

63 63 63
2006 2248 2500
2068 2311 2563

724 770 819

9836 10340 10912
49 52 56

17 18 19
38 41 43
10664 11221 11850

12733 13532 14413

324 324 324

12293 13060 13897
11 11 12
73 103 144

15 16 17
2 3 3
0 0 0
13 14 15
12733 13532 14413

Yes Yes Yes

Projection rationale

Assuming no new stock issuances or employee stock redemptions/issuances

Constant as % of AUM at 2020 level

Used to balance
Constant as % of AUM at 2020 level

Constant as % of AUM at 2020 level

Constant as % of AUM at 2020 level

Retained at FY2020 levels

Advances projected in Tab 2 minus provisions
Constant as % of AUM at 2020 level
Growing at FY19-20 rate

Constant as % of AUM at 2020 level

Constant as % of AUM at 2020 level
Retained at 0
All figures are FY2020 unless specified
All figures in INR Cr

Loan book composition

Repco
Borrower FY20 FY2019 FY2018
Salaried 48.40% 45.90% 42.90%
Non-salaried 51.60% 54.10% 57.10%

Repco
Product mix FY20 FY2019 FY2018
Non-HL 18.70% 18.40% 18.60%
Home loans 81.30% 81.60% 81.40%

Borrowing

Repco
Source Avg. cost 2020 FY2020 FY2019
NHB 6.9% 781 903.6
Deposits
Repco bank 8.3% 1060.4 798.7
Commercial banks 8.5% 7566.5 6749.7
NCDs 8.1% 650 827
Commercial papers 5.1% 0 0
Total 10057.9 9279

Geo presence

Repco
State FY20 FY19
AP 6.2% 6.7%
Telangana 4.6% 4.6%
Gujarat 3.6% 3.3%
Karnataka 14.1% 13.8%
Kerala 3.3% 3.7%
Maharashtra 9.2% 8.4%
TN 55.9% 56.6%
Others 3.0% 3.0%
Total 100.0% 100.0%

NPA

Repco
FY2020 FY2019
GNPA 4.30% 3.00%
NNPA 2.50% 1.40%
CAR
Avg. ticket size

HDFC Aavas financiers Sundaram CanFin

27 8 24 18

Employees

HDFC Aavas financiers Sundaram CanFin

3095.0 4581 827 826
 Peers
HDFC Aavas financiers Sundaram CanFin
80% 35% 71%
20% 65% 29%

Peers
HDFC Aavas financiers Sundaram CanFin
27% 10%
74% 90%

pco
FY2020% FY2019% HDFC
8% 10% 8.4%
0% 0%
11% 9%
75% 73%
6% 9%
0% 0%
100% 100%

Peers
Region HDFC Aavas financiers Sundaram CanFin
South 37% 95% 70%
West 32% 2%
North 27% 2%
East 4% 1%

Peers
HDFC Aavas financiers Sundaram CanFin GIC Housing Finance
1.99% 0.5% 3.8% 0.8% 5.37%
0% 0.3% 1.6% 0.5% 3.01%
21% 56% 23% 22%
GIC Housing Finance Edelweiss Housing

GIC Housing Finance Edelweiss Housing

GIC Housing Finance Edelweiss Housing

GIC Housing Finance Edelweiss Housing

60%
40%

Peers
Aavas financiers Sundaram GIC HousingEdelweiss
CanFin Finance Housing
8.40% 8.30% 7.90% 8.10%

GIC Housing Finance Edelweiss Housing

Edelweiss Housing

29%
All figures are FY2020 unless specified
All figures in INR Cr

M. Cap.
Loan book Loan book
Company (07/08/2020 Equity 2020 Equity 2019
2020 2019
)
Repco 869 1830 1557 11826 11037
HDFC 308405 86158 77356 450903 406607
Aavas financiers 10595 2098 1837 7796 5942
Sundaram NA 1421 1252 9305 8855
CanFin 4963 2150 1782 20708 18016
GIC Housing Finance 494 1263 1254 12822 11659
Edelweiss Housing NA 769 769 4361 5396

Cost of
Company P/BV Yield NIM Spread
borrowing
Repco 0.5 11.5% 4.3% 8.50% 3.0%
HDFC 3.6 9.9% 2.7% 8.40% 1.5%
Aavas financiers 5.1 11.5% 6.3% 8.40% 3.1%
Sundaram NA 11.4% 3.8% 11.4%
CanFin 2.3 10.4% 3.5% 7.90% 2.5%
GIC Housing Finance 0.4 10.2% 2.5% 8.10% 2.1%
Edelweiss Housing NA 13.0% 3.4% 13.0%
 Loan book Interest Interest Other Operating
NII PPOP Provisions
2018 income expense income Expense
9857 1317 825 492 34 106 420 59
359442 42647 31001 11646 16117 1498 26265 5913
4073 787 356 431 116 230 317 15
8078 1034 691 343 44 120 268 50
15743 2019 1344 675 12 108 579 60
9984 1244 944 300 11 99 212 100
4458 565 419 146 42 149 39 41

Cost to Expense Loan book

RoA RoE FTE Asset / FTE
income ratio ratio growth
22% 0.9% 2.5% 17% 10% 994 12
13% 0.3% 4.1% 22% 12% 3095 146
53% 3.3% 3.6% 13% 38% 4581 2
35% 1.3% 1.7% 12% 7% 827 11
16% 0.6% 1.9% 19% 15% 826 25
33% 0.8% 0.4% 4% 13%
102% 3.4% 0.0% 0% -1%
PBT PAT
360 281
20351 17770
301 249
218 158
518 376
112 46
-2 1.6