Repco Home Finance delays its ₹25,000 cr AUM goal by one year
Management blames competitive pressure and high prepayments for the target shift to FY29, even as annual profit climbed 26%.
What's new
- AUM target pushed back to FY29 to account for competitive headwinds and prepayments.
- NHB sanctioned a ₹600 cr refinance facility, set to cut funding costs by 10-15 bps.
- FY27 disbursement guidance set at ₹5,000 cr with expected spreads of 3.2-3.25%.
Why it matters
A guidance reset on long-term growth suggests the competitive environment in home finance is tighter than management anticipated. While the NHB facility provides a small buffer for margins, the spread compression reflects a cooling outlook on profitability.
What we're watching
- Whether the FY27 disbursement target of ₹5,000 cr holds firm in coming quarters.
- Actual progress on spread compression towards the 3.2% range.
- Any further shifts in the timeline for hitting the ₹25,000 cr asset milestone.
The full read
Repco Home Finance is adjusting its long-term math. The company now expects to reach ₹25,000 crore in assets under management by FY29, a one-year delay from its previous FY28 target. Management points to a combination of structural prepayment headwinds and persistent competitive pressure as the cause. This adjustment comes despite a 26% year-on-year rise in annual profit to ₹376 crore. To soften the blow on its balance sheet, the company secured a ₹600 crore refinance facility from the National Housing Bank. This deal should trim funding costs by 10-15 basis points. With management guiding for ₹5,000 crore in disbursements for FY27 and further spread compression down to 3.2-3.25%, the focus is clearly shifting toward managing margins in a difficult lending environment. The delay is the news; the lower cost of funds is the attempted fix.