Repco Home Finance share price: Buy Repco Home Finance, target price Rs 650: ICICI Securities

ICICI Securities has buy call on with a target price of Rs 650. The current market price of Repco Home Finance is Rs 380.75. Time period given by analyst is one year when Repco Home Finance price can reach defined target.

Repco Home Finance Ltd., incorporated in the year 2000, is a Small Cap company (having a market cap of Rs 2401.73 Crore) operating in NBFC sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 359.75 Crore, up 2.72 % from last quarter Total Income of Rs 350.22 Crore and up 5.49 % from last year same quarter Total Income of Rs 341.02 Crore. Company reported net profit after tax of Rs 79.60 Crore in latest quarter.

Investment Rationale
Options to shore up capital buffer amidst underwhelming financial performance, rising stress or approval of its application for universal bank license, might serve as triggers. Assigning some probability to this trigger (though timing is difficult to predict) and stable return profile (in absence of any event), the brokerage believes the stock can command 1.75x FY23E multiple to stressed book. It revises target price to Rs650 (earlier: Rs362) implying 70% return. Key risks: 1) Repco Bank unwilling to sell stake under any circumstances, 2) fundamentally weak performance derailing growth and credit quality amidst covid disruption.


Promoter/FII Holdings

Promoters held 37.1 per cent stake in the company as of March 31, 2021, while FIIs held 19.1 per cent, DIIs 20.1 per cent and public and others 23.6 per cent.