When Repco Home Finance’s December quarter financial results came out, it disappointed the market on most parameters. Despite this, some brokerages are still recommending this bet as they believe that the business of this firm can pick up and it can see faster growth in its asset quality and loan book in the coming times.
Apart from this, the brokerage is also considering the appointment of K Swaminathan as the new MD and CEO of the firm and K Lakshmi as the CFO. Due to all these reasons, many brokerages have expressed the possibility of 30 to 135 per cent rise in its shares in the next one year.
ICICI Securities said in a note that the stock is undervalued and has given a new target price of Rs 563 for the stock. However, this is lower than the earlier target price of Rs 650 given by ICICI Securities to the stock. However, it is still around 135 per cent higher than the current price of the stock. Shares of Repco Home Finance closed at Rs 233, down 1.69 per cent on the NSE on Thursday.
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The brokerage said Repco’s new CEO K Swaminath may join the company from April and thereafter the company’s growth strategy and new business initiatives will be closely monitored as these will determine the company’s earnings pace.
The company’s third quarter results were disappointing, with profits falling 60 per cent to Rs 31.47 crore. The company’s net interest margin (NIM) also declined to 5 per cent, from 5.2 per cent in the September quarter. Gross- NPAs grew by 2.70 per cent on a quarterly basis. The brokerage said that the arrival of a new CEO in the company is an important event at this juncture.
Motilal Oswal has cut the company’s FY22 profit estimates by 22 per cent and said that only after the new CEO comes, some changes can be seen in the growth of the company. Motilal Oswal has given a target price of Rs 370 to Repco Home Finance stock, which is about 58 per cent higher than its current price.
Talking about other brokerages, HDFC Securities has given a target price of Rs 328 to Repco Home Finance shares for a period of one year, which is nearly 40 per cent higher than its current price. On the other hand, Sharekhan has given a target price of Rs 275 for the shares of Repco Home Finance for the medium term, which is about 18 per cent higher than its current price.
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