Investors looking to invest in stocks found a reason to celebrate as Repco Home Finance shares surged by up to 7.57% on November 13, 2024. This impressive rally saw the stock reach an intraday high of ₹497.20. The increase followed the release of the company's robust Q2 FY25 results, highlighting a 15.3% year-on-year (YoY) growth in standalone profit, which reached ₹113 crore, up from ₹98 crore in Q2 FY24.
Strong growth in net interest income and total income
Repco Home Finance's Q2 results showcased promising indicators for those choosing to invest in stocks. The company's net interest income (NII) rose by 1.7% YoY, amounting to ₹176 crore compared to ₹173 crore in the previous year's quarter. Total income also showed solid growth, reaching ₹428 crore during the quarter, underscoring a steady income base that can encourage potential investors to invest in stocks.
Impressive loan sanctions and disbursements
A key highlight for investors is Repco Home Finance's annual growth in loan sanctions, which rose by 8% YoY to ₹926 crores in Q2 FY25. Loan disbursements also increased by 9% YoY, amounting to ₹867 crore. This growth aligns with the company's objective of expanding its loan portfolio, making it an attractive prospect for those looking to invest in stocks with a focus on the housing finance sector.
Improving asset quality
Repco Home Finance's asset quality saw a notable improvement, with gross non-performing assets (GNPA) reduced to ₹552 crore as of September 30, 2024, compared to ₹637 crore on September 30, 2023. Net non-performing assets (NNPA) similarly declined, standing at ₹217 crore, down from ₹272 crore YoY. The company's commitment to reducing bad debt further strengthens its position, making it a promising option for individuals considering investing in stocks.
Expanding loan portfolio and enhanced returns
Repco Home Finance's loan book rose to ₹13,964 crore, reflecting an 8.1% YoY increase from ₹12,922 crore. The company also recorded a healthy return on assets (RoA) of 3.3% and a return on equity of 16%. This robust loan portfolio expansion signifies a potential for sustained returns, appealing to investors interested in investing in stocks with a reliable growth trajectory.
Capital adequacy and geographic presence
Repco Home Finance reported a strong capital adequacy ratio of 33.98% in Q2 FY25, indicating sufficient capital buffers for future growth. The company's network spans 184 branches and 43 satellite centres across Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Kerala, Maharashtra, Odisha, Gujarat, West Bengal, Madhya Pradesh, Jharkhand, Rajasthan, and Puducherry. This extensive presence enhances its ability to tap into diverse markets, offering a stable outlook for those seeking to invest in stocks within the housing finance industry.
Affordable loan options attracting borrowers
Known for offering a variety of affordable housing loans, Repco Home Finance provides nine different home loan products with a competitive floating interest rate starting at 8.25% per annum. These options make the company attractive not only to borrowers but also to investors looking to invest in stocks within the financial sector, given the potential for consistent demand for housing finance solutions.
Performance comparison with the broader market
At 10:36 AM on November 13, Repco Home Finance shares were trading 2.37% higher at ₹473.15, while the broader BSE Sensex was down by 0.61%, reflecting investor confidence in the company's financial performance. The strong Q2 results and promising growth indicators make Repco Home Finance a compelling choice for individuals planning to invest in stocks with a focus on long-term growth in the housing finance sector.
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