This article first appeared on GuruFocus .
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Disbursements:INR1,069 crores in Q2 FY26, up from INR867 crores in Q2 FY25.
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Sanctions:INR1,206 crores in Q2 FY26, compared to INR926 crores in Q2 FY25.
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Loan Book:INR15,033 crores as of September 2025, an 8% growth from INR13,964 crores a year ago.
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Net Interest Margin (NIM):5.5% for Q2 FY26.
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Net Profit:INR107 crores for Q2 FY26.
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Return on Assets (ROA):2.9% for Q2 FY26.
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Return on Equity (ROE):13.5% for Q2 FY26.
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Cost to Income Ratio:28.4% for the quarter.
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Gross NPA (GNP):INR475 crores at 3.16% as of September 2025.
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Net NPA:INR225 crores at 1.50%.
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Provision Coverage Ratio:52.54% for Stage 3 assets.
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Stage 2 Assets:INR1,323 crores as of September 2025.
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Branch Network:234 touchpoints, including 203 branches and 31 satellite centers.
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Release Date: November 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Repco Home Finance Ltd ( BOM:535322 ) achieved its highest ever quarterly disbursement of INR 1,069 crores in Q2 FY26, marking a significant milestone.
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The company maintained a stable growth rate of 22% in disbursements month-on-month, indicating strong business momentum.
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The cost of funds saw a marginal reduction, and the company passed on the benefits to customers by reducing the marginal lending rate.
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Repco Home Finance Ltd successfully diversified its borrowing profile, issuing INR 150 crores of commercial paper and receiving positive responses from institutional investors.
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The company plans to open additional branches, expanding its network to enhance business reach and customer engagement.
Negative Points
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Despite high disbursements, the AUM growth remains a challenge due to significant rundown on the legacy book and competitive pressures.
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Employee costs have increased due to realignment of incentive policies, promotions, and additional manpower, impacting overall expenses.
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The company's return on assets (ROA) decreased from 3.2% to 2.9%, raising concerns about maintaining profitability in a declining interest rate environment.
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The gross NPA remains a concern, with a target to reduce it from INR 475 crores to INR 450 crores by the end of the current quarter.
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There is a need for higher dividend payouts to improve return on equity (ROE), as current payouts are considered low relative to profits.
Q & A Highlights
Q: Congratulations on surpassing INR1,000 crore in disbursements. Could you elaborate on the AUM growth and the increase in costs due to employee recruitment? A: (Thangappan Karunakaran, CEO) The AUM growth is affected by the rundown of the legacy book, but we are controlling BT outs and expect a 30% increase in disbursements quarter-on-quarter. The increase in costs is due to realigning our incentive policy, celebrating our silver jubilee, and opening new branches, which required additional manpower.
Q: What are your plans to achieve the INR16,000 crore AUM target by March 2026? A: (Thangappan Karunakaran, CEO) We plan to disburse INR1,100 to INR1,150 crores in Q3 and INR1,350 to INR1,400 crores in Q4. We are confident of reaching the INR16,200 crore AUM target by the end of the financial year.
Q: How do you plan to reduce the G&PA to 2.5% by March 2026? A: (PK Vaidyanathan, CDO) We have implemented strategies like appointing General Managers for different regions and creating a recovery vertical to monitor NPAs. We also introduced a special work scheme for FY25-26, which should help us reduce G&PA to INR450 crores by the end of the quarter.
Q: Can you explain the increase in other expenses this quarter? A: (Thangappan Karunakaran, CEO) The increase in other expenses is due to administrative costs from opening new branches and celebrating our silver jubilee. These are mostly one-time expenditures.
Q: What is the strategy behind buying loan portfolios, and how does it affect organic growth? A: (M. Raja, Chief Business Officer) While we focus on organic growth, we are also considering book purchases as an add-on. We have experience in selecting loan books and will continue to explore this avenue without compromising our organic growth targets.
Q: How are you managing the competitive pressure on yields and maintaining asset quality? A: (Thangappan Karunakaran, CEO) We have improved underwriting standards, and our new loan book shows minimal NPAs. We have a credit review team to ensure quality and profitability in growth, and we are confident in maintaining asset quality despite competitive pressures.
Q: What are the expected reductions in the cost of funds for the upcoming quarters? A: (Thangappan Karunakaran, CEO) We expect a 10 to 15 basis points reduction in the cost of funds over the next two quarters, as INR6,000 crores of bank borrowings are due for repricing.
Q: Can you provide details on the average tenure and ticket sizes for home loans and non-home loans? A: (Thangappan Karunakaran, CEO) The average tenure for home loans is 14 to 15 years, with an actual life of 8.5 to 9 years. For non-home loans, the average tenure is 8 to 9 years, with an actual life of 6 to 6.5 years. The average ticket size for both is around INR23 to INR24 lakhs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
