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Repco Home Finance has reported a stellar 37.88% rise in net profit for the second quarter of the fiscal year 2024. The Chennai-based housing finance company's earnings surged to Rs 98.10 crore, up from Rs 71.15 crore recorded in the same period last year, as detailed in its recent BSE filing.
The company's performance in the quarter ending September 30, 2023, reflects a solid financial trajectory, with its net consolidated total income climbing to Rs 383.91 crore — a significant 20.89% increase from Rs 317.58 crore reported in the corresponding quarter of the previous fiscal year.
In a strategic move to further bolster its financial position, the board of directors has sanctioned the issuance of Non-Convertible Debentures (NCDs) and Commercial Paper (CPs) amounting to Rs 250 crore and Rs 200 crore, respectively. These funds are to be raised on a private placement basis, spread over multiple tranches.
The company's leadership also saw a reshuffle with the appointment of Anant Kishore Saran as an additional non-executive & non-independent director, enhancing its board composition.
Financial operations showcased positive trends, with loan sanctions and disbursements experiencing a growth of 4% and 7%, respectively. The company disbursed loans worth Rs 797 crores compared to Rs 746 crores in the same period last year. Despite these increases, the loan spread remained constant at 3.4%.
Repco Home Finance’s overall loan book stood at Rs 12,922 crores as of September 2023. Notably, the loan portfolio was balanced between the salaried and non-salaried segments, with a slight majority of 51% in favour of the non-salaried. Housing loans continued to dominate the loan book, comprising 76.2%, while Home Equity products accounted for the remaining 23.8%. The company highlighted that all loans disbursed were retail loans, maintaining its focus on the individual borrower segment.
The firm's asset quality showed a substantial improvement, with Gross Non-Performing Assets (GNPA) declining to Rs 637 crores, compared to Rs 786 crores the previous year. Net Non-Performing Assets (NNPA) also saw a decrease to Rs 272 crores. These reductions brought the GNPA and NNPA ratios down to 4.9% and 2.2%, respectively, presenting a healthier financial status than the previous year's ratios of 6.5% and 3.8%.
Further financial prudence is evident from the company's provisions for expected credit losses, standing at Rs 526 crores, or 4.1% of total loan assets. The Stage-3 asset coverage ratio was reported at 57.4%. Additionally, the capital adequacy ratio significantly exceeded the regulatory minimum of 15%, reaching 35.8%, indicating a robust capital reserve to absorb potential losses in the future.
In conclusion, Repco Home Finance's Q2 FY24 results reflect a company that is not only growing but also improving the quality of its loan book and strengthening its financial foundations. With an increase in profits, controlled asset quality, and strategic fund-raising initiatives, the company is positioning itself for sustained growth and stability in the competitive housing finance sector.
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