Ladies and gentlemen, good day, and welcome to Repco Home Finance Limited Q4 FY 2026 earnings call, hosted by Yes Securities Limited. Please note all participants are currently in listen-only mode. There will be an opportunity for you to ask questions following the conclusion of the management's opening remarks. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Mehta from YES Securities. Thank you, and over to you, sir.
Thanks, Swapnil. Good evening, everyone. Thank you so much for joining this fourth quarter and financial year ending March 31, 2026, call of Repco Home Finance. We have with us from the management team, Mr. T. Karunakaran, MD and CEO; Mr. P.K. Vaidyanathan, Whole-Time Director and Chief Development Officer; Mr. M. Raja, Chief Business Officer; Mr. A. Palpandi, Chief Operating Officer; Mr. Ankush Tiwari, Company Secretary and Compliance Officer; and Ms. Shanthi Srikanth, the CFO. With this, I pass on the call to Mr. Karunakaran for his opening remarks. Post which, Swapnil, you can open the floor for Q&A. So over to you, Karunakaran, sir.
Thank you, Mr. Rajiv. Good evening to all, and I am extending a warm welcome to this earning call to discuss the performance of our company for the financial year 2025/2026 and way forward. Our board yesterday approved the financial results of our company for the financial year 2025/2026. Post-approval, we have uploaded our financial results and a PPT containing our performance in our website as well as stock exchange websites. I believe you would have had a chance to go through our performance results and whatever PPT we have uploaded in the stock exchanges and our websites. For those people who do not have a chance to see our results, I would like to go through our performance quickly before opening the floor for Q&A.
Coming to the business, we have seen substantial improvement in the disbursement side, both quarter-on-quarter as well as year-on-year, we have seen improvement. During the quarter ended March 2026, we have disbursed INR 1,186 crores. Of course, this is the highest disbursement in our company. In the whole year, we disbursed INR 4,148 crores. Again, this is the highest disbursement. During the same period in last financial year, we have disbursed INR 3,284 crores. Our disbursement in 2025/2026 is up by 26%. If you compare disbursement of March quarter with the December quarter, December quarter, we have done a disbursement of INR 1,064 crores, and March quarter we have done INR 1,186 crores. We have seen 12% growth in the disbursement. Overall, quarter-on-quarter and year-on-year, we have seen substantial improvement.
Again, this financial year, September, December as well as March, we crossed INR 1,000 crore mark disbursement in a quarter. If you look at contributions of loan disbursements state-wise, Tamil Nadu remain highest out of total disbursement of quarterly as well as yearly disbursement. Almost 60% of the disbursements are coming from Tamil Nadu. Last quarter, that means December to March, we have seen disbursement improvement in Karnataka, Maharashtra, Telangana, and Madhya Pradesh. Going forward, I'm expecting more disbursement from these states. If you look at loan book mix, we have not seen any changes in loan book mix. Out of total loan book, 71% of the loan book is HL and 29% is non-HL. Total loan book at end of the financial year stood at INR 15,880 crores as against INR 14,496 in the last financial year. We have seen growth of about post about 9.5% or 9.6%.
Even salaried versus non-salaried, we have not seen any change. As end of the March, out of total loan book, salaried class accounted for 46% and non-salaried class accounted for 54%. These are different disbursement as well as AUM side. In respect of yield, overall yield as end of the March stood at 11.9% as against 12% in December 2025 and 12.07% in March 2025. If you ask the breakup of yield, that also we have not seen any changes in the yield by assets or even profile mix. Salary class yield stood at 11.36%, and non-salary class yield stood at 12.27%.
I'm getting a yield of 11.16% from home loan and 13.44% from non-housing loan. This is a yield I am getting from HL, non-HL, and salary class and non-salary class. Last, I mean, 2025/2026, we disbursed INR 4,148 crores. Out of INR 4,148 crores, approximately INR 700 crores went to meet up the regular repayment and about another INR 2,000 odd crores went to meet prepayment, pre-closures, BT out and all. So net increase in our overall loan book is about-
T. Karunakaran, sir, we are unable to hear you. Okay.
There was some network issue.
Sure, sir. We can hear you.
Yeah. It's about INR 1,300 crores. in March quarter alone, we have seen incremental in loan book to the extent of INR 485 crores as against INR 360 crores in December 2025. Aside from loan book, BT out are under control and on average, we have experienced about INR 35 crores- INR 36 crores per month BT out. BT in is per month, this is approximately about INR 45 crores- INR 50 crores per month. This is our experience in last financial year. Net- in- net, that means BT out between net and net, the gain almost on an average about INR 15 crores- INR 20 crores gain we got in a month in last financial year. Coming to asset quality, we have seen reduction in NPA. As end of the March 2026, our NPA stood at INR 405 crores which was about INR
475 crores in the corresponding period of the previous financial year. Even quarter-on-quarter also, we have seen reduction in NPA. At end of December, our NPA was about INR 450 crores. GNPA, last year, at the end of 2025, our GNPA was 3.26%, which we brought it down to 2.55% as end of March 2026. Even we have seen substantial fractions improvement in stage two assets also. At the end of the financial year 2026, our stage two assets stood at INR 1,115 crores as against about INR 1,410 crores in the corresponding period of the previous year. The overall book, the stage two assets stood at almost close to 7%, whereas the same was close to about 9.5% in the previous financial year. We have seen improvement in all the buckets. SMA zero, one, two, three, all those things we have seen substantial improvement.
The cumulative provision for all NPA as well as standard assets stood at INR 343 crores as the end of the financial year 2026. Almost we are maintaining a provision coverage ratio of 55%. We are doing provisions as a conservative basis. We are following an Indian accounting standard model. As per model, we are providing more. As per the model, we need to provide in and around 26%-27% for NPA loans. That is, we are maintaining about close to 55% as a conservative and prudent measure. Additionally, the provision what we are made under IRAC norms is much, I mean, maintains thing much, much higher than IRAC provisions. Then coming to new loan, the book-wise performance. New loan book, that means loans given post 2022 is doing good. The overall NPA in the new loan book is about close to 1%.
Even stage two assets in the new loan book is about 3.9%. Coming to the borrowing side, at the year beginning, we started diversification in our liabilities. During the current financial year, I mean, 2025/ 2026 financial year, we have issued a commercial paper to the extent of about INR 150 crores. In last quarter, we have done one pass-through certificate. December last, I mean, December came to March, we have issued an NCD to the extent of INR 125 crores. As end of March, our overall borrowings stood at INR 12,250 crores. Out of total borrowings, almost 6.2% of the funding is coming from National Housing Bank, and 85% of the funding is coming from banking system, and about 5.39% is coming from Repco Bank. CPs accounted for about 1.2%, and pass-through certificate and NCDs accounted for almost 2%.
Our cost of fund at end of the year stood at 8.56%. I am very happy to share that National Housing Bank has sanctioned INR 600 crores refinance facility to our company. In yesterday board meeting, they approved the sanction. Very soon, we are going to execute the document and going to avail. Going forward, I am expecting it will help me to help the management to reduce our cost of funds. This is from borrowing side. Profitability side, yes. Few new expenditure items and certain one-off items affected our overall income and expenditure and profitability of the company. I would like to list such items. With effective from April 2024, as advised by the regulator, we have changed the interest calculations method. We have switched over to daily balancing method.
Because of the change in the interest calculation method, our interest income is down by INR 11.53 crores in the current financial year. All of you are aware that labor code was implemented with effective from November. Because of implementation of labor code, we charged INR 15 crores to P&L to comply with the new labor codes. One-off season expenditure like silver jubilee year. This is 2025/2026 is silver jubilee year for us. We celebrated silver jubilee year in first quarter and we conducted the review meeting in person. Such expenditure, we cost INR 5 crores. Again, CSR expenditure, normally we used to do 2% of the average profit of last three years. In the financial year 2025/2026, we increased to 5%. On account of this, we additionally charged INR 15 crores. If it were 2%, it would be INR 10 crores.
Since we have increased from 2% to 5%, we add additional cost of INR 15 crores. All these items put together is some approximately INR 46 crores. Otherwise, my profit would have been more by INR 46 crores in the current financial year. Our Q4 profit stood at INR 129.11 crores as against INR 108.77 crores in the December quarter. Our overall year profit stood at INR 453 crores as against INR 449 crores in the last financial year.
Ratios wise, our NIMs stood at 5.38% as against 5.15%. This was from profitability side. Our ROA stood at 3%. The cost of fund I already told you, it is 8.56%, and the yield on advances, I already told you, it is about 11.9%. So that is why we are maintaining a healthy spread of 3% and a NIM of 5.38%. Cost to income ratio stood at 58.71. These are from profitability and ratio side.
Network, we are having 242 branches, including satellite centres and branches. In the financial year 2025/2026, we will open nine offices across the country. Coming to our dividend, all of you are aware that we have already declared an interim dividend of about 45%. Yesterday board meeting, board has declared a 30% final dividend subject to approval of the shareholders. So our total dividend for the financial year 2025/2026 is 75%, which is the highest dividend what we declared in the RHFL history. These are the things I want to tell before opening the floor to Q&A. Again, take this opportunity to thank all our valued customer, all shareholders, analysis rating agencies for bankers, investors for continuous support. Now, I open the floor for Q&A.
Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may click on the raise hand icon from the participants tab on your screen. We request participants to restrict to two questions per person, and then return to the queue for more questions. To rejoin the queue, you may click on the raise hand icon again. We will wait for a few minutes until the question queue assembles. We will take a first question from Vikas Kasturi of Focus Capital. Vikas, please go ahead and unmute your microphone. Vikas, please go ahead and ask a question. I think we have a connection issue from Vikas. We have our next question coming in from Amit Mehendale of RoboCapital. Amit, please go ahead.
Hi. Thanks for the opportunity. Am I audible?
Yes, we can hear you.
Great. Thanks. My first question is on the loan book. Our earlier aspiration was to do about INR 25,000 crores of loan book by FY 2028. Are we still on track on the earlier aspiration?
Yes. Last year, I remember my first phone call, I said, INR 4,000 crore disbursement in the financial year 2025/2026 years. We have done a INR 4,000 crores disbursement. Current year, we are seeing a target of we said we want to achieve a disbursement of approximately INR 5,000 crores disbursement. I am expecting a prepayment as well as repayment of about INR 2,940 crores.
Of the INR 2,940 crores, approximately INR 2,060 crores will go to AUM, remaining will use to set off for my prepayments as well as repayments. My year-end target for the current financial year is about INR 18,000 crores. That means in a nutshell, we want to disperse about INR 5,000 crores, and we want to take it up to our AUM to INR 18,000 crores. Yes, at two years down the line, yes, we will be in a position to achieve a INR 25,000 crores AUM.
Basically FY 2029, are we saying that we have about a year of delay, so in three years we will get there?
Yes, yes.
How much of inorganic loan book growth are we expecting?
No, right now, yes, we want to do some book buy, not on very big way or aggressive manner. To set the things we may do this financial year about INR 25 crores-INR 30 crores, not more than that. Majority of my book is from our own, not buying from the market.
Sir, actually, sir, if you look at it, our loan book growth is significantly below our dispersal growth. That problem exists for some period of time now, either through BT out. How do you see that going forward? Unless that problem is solved, the loan book growth will become a challenge.
Sir, we have taken a lot of steps to correct BT out. Now the BT out are hopefully under control. The average BT out as of now is about INR 30 crore- INR 35 crore per month. BT out are really under control. Of course, to retain a good customer, we have reduced our interest rate also because of that our spread also slightly came down.
Amit, to add on more to that, considering that my portfolio or my organization has been in existence for the past 25, 26 years, I have quite a vintage book. As you are aware in the market, my mortgage loan gate to gate is not more than seven to eight years. I will have to expect and accept rundown of my book because of maturity alone. Even if I am going to control my BT or the takeovers, my natural runoff of book will happen. We will have to increase our disbursement suite, and that is exactly what we are planning to do and we are doing.
Second thing, in addition to majority of my loan books are non-salaried class customer. Substantial portions we link to non-salaried class customer. The habit of non-salaried class customer, business class people is as and when they are having a surplus cash flows in the business, they will come to us prepay and close the loan. As and when they require the loan, they will come to us. We have also experienced that those who take the loan for investment purpose, for example, buying the second house, third house or something like that. After some times they are selling, pre-closing the loan.
That is also we have experience in the last financial year. The only way left with is prepayment, pre-closures in the 25 years of whole company. It is very difficult to avoid market also that very much competitive. The only way left way of activities to increase the book is to disperse more aggressive in the disperse a bit, but at the same time we don't want to dilute quality in the disbursements, which is a hint from our performance of new loan book.
Right, sir. Thank you. My second question is on CSR. Are we going to continue with the 5% spend going forward?
Right now we don't have any plan. We want to stick it in and around 2%-3%. I'll come out. I'll answer your question in next my concall. Right now I'm not in a position to give the exact numbers. Right now my idea is about 2%-3%, not more than that.
Right. Could you elaborate why was it suddenly raised from 2%- 5%?
You know well, that last year is a silver jubilee year, so we have run this thing.
Okay.
We will also get a brand visibility. See, we are spending, we will get a brand. That is brand visibility we will get.
Thank you so much.
Which will improve my business. That is only we invested in.
Yes, sir. Thank you.
Thank you so much. Requesting all participants to restrict to two questions only and then if you have any follow-up questions then you can return to the queue. We are taking our next question from Shubhranshu Mishra of Phillip Capital. Please go ahead.
Sir, good afternoon. Thank you for the opportunity. This particular number that we are talking about in terms of INR 2,000 crores of BT out prepayment, which was for the full year. What is the proportion of prepayment and what is the proportion of BT out here? In this monthly run rate, sir, of BT out and BT in that we are doing, where is our loan going out, sir? Which all HFCs or banks are taking up these loans? If you can name them. From where are we getting this BT in, sir? Thank you.
Yeah. Shubhranshu, I will take this question. Raja here. See, most of my BT outs are going to my public sector banks. Obviously, because of my rate of interest and the difference is the same. My BT ins are coming from HFCs, mostly from the segment of self-employed profiles. That is what we have been witnessing and I believe that will continue because the public sector banks are now getting aggressive and they are more concentrating on taking over a vintage loan. That is where we are bidding. When you ask about the percentage of BT in and BT out, net to net between BT in and BT out, my BT ins are more than my BT outs. As of today, I am enjoying on that. Yes.
No, sir, that is not what I asked. In the opening comments I think what was mentioned is that there was INR 2,000 crores of BT out and prepayment. I wanted a split between prepayment and BT in.
No. Okay. BT in, as my boss said, on the BT out I am experiencing almost INR 30 crores-INR 35 crores per month. So for the year it is almost what, around INR 400 crores per month, s orry for the year. I am having a BT out of INR 400 crores and the balance is my repayment and prepayment and pre-closures.
Repayment split. How much is
I will clarify like this. See, last year we got a principal rundown of about approximately INR 2,670 crores. Okay, out of INR 2,670 crores, scheduled repayments, scheduled principal repayments is approximately about INR 700 crores. Remaining approximately about INR 2,000 crores, INR 1,900 crores is a principal repayment, prepayment, pre-closures, everything put together. Of which BT out is about close to INR 400 crores. I hope I am clarified.
Yes, sir. But what is repayment and how much is prepayment is what I am trying to establish, sir.
Prepayment, that means partial prepayment is roughly about INR 256 crores. Full payment is about INR 1,650, INR 1,675 crores.
Entire foreclosure of loans is INR 1,700 crores, sir.
Yeah.
Is this a normal run rate which happens each year?
Yeah. It is a normal. Yes, we compared with the same number with the previous financial year. It is a normal thing. Of course, BT out is controlled in 2025/2026 compared with 2024/ 2025. BT out is well controlled in 2025/2026. Other prepayment foreclosures are almost similar. I told you the majority of my borrowers are non-salaried plus customer. As and when they have excess cash flows in the system, they will come to us pre-close, and they will take a new loan at a later date.
Understood, sir. One last question is just a data keeping question, sir. If you can repeat the yields on salaried, non-salaried, and HL and non-HL, sir. Thank you.
Yeah. Out of INR 15,880 crores is my loan book as at end of March 2026. Of which salaried class is about INR 7,410 crores, non-salaried class is INR 8,470 crores. In terms of percentage, salaried class is 46% and non-salaried class is-
The yield. Sorry, yield.
Oh, you are talking about yield.
Yes.
Yield, approximately I am getting 11.36% from salaried class customer and non-salaried class customer on an average it is about 12.25%-12.27%. Depends upon the profile of the customer, it will vary.
HL and non-HL, sir?
HL approximately is about 11.16%. Non-HL, it is about 13.44%.
Understood, sir. The difference between our yield and APR is ballpark same or there is a substantial difference in APR and yield?
It's almost same, sir.
Thank you so much, sir. Best of luck for upcoming quarters.
Thank you.
Thank you. We will take our next question from the line of Vibhor Talreja of Nest Amplifier. Vibhor, please go ahead with your question now.
Hi. Thank you for the opportunity, sir. Sir, the question is very similar. Look, congratulations on the silver jubilee, but as investors for the last decade, we are sitting at 25% loss at a time when the index is up 3X. On the AUM growth for the last five, six years, the CAGR is 6%, 7%. Even this year, the guidance was INR 16,200. We have ended up at INR 15,850 or something. While we are continuing to do disbursements, the AUM growth is much lower, which is where most of the other questions were. I heard the guidance this time also at INR 5,000, which is higher, but the AUM growth at INR 18,000. One is the sanctity of this, but I do not have many questions.
I just wanted to share that one has been a long-term shareholder, but it has been a very difficult journey, and the entire market is not recognizing our efforts, and they are not visible. That is why we are trading at five times the very much unlike the entire market. We do not have any asset quality issues also. Our asset quality is doing phenomenally well. Our NPAs are reducing. The credit costs are zero. I am sure as management you would have seen that, but sometimes it takes us to be a shareholder to realize the pain, so that we are putting in all the best efforts because sometimes it is BT out, sometimes it is principal repayment, sometimes it is the kind of customer which should be there for all housing finance companies.
We have seen that especially at the scale we are and the bank advantage we have, most companies have grown phenomenally better in a year, in a two year, in a a three year, in a five year, in a 10-year phase. Somehow none of that happens. We disclose very good data and numbers. We are very good proactively disclosing the numbers, but the AUM growth just does not come in. That is what is the big game changer in a lending business. I will pause here, and if there are comments that I should keep in mind, I would like to, but I just wanted to mention what I just shared.
Yeah, you are right. We also have that pain. We stand with you. Yes, our AUM growth, as we are looking at an organic growth, we are required to manage all the parameters and all the variables in the market. As I said, because of a vintage book, I have no other choice if a customer comes in for a pre-closure after five years, six years, seven years, I will have to accept it. Though I try to retain him, we do have a retention policy and all those things, but still, as you rightly pointed out, our book growth is getting restricted because of the vintage of the book and the closure.
Also, as my boss said, because we being in more of a self-employed kind of a profile, customers do come in for bulk repayments quite often. We cannot and we should not stop them also. The only choice I have is to run faster, that is to increase my disbursements, which yes, we are trying to do it by also reducing our cost of funds so that I can get into more of a retail game. We are planning and strategizing. We will have to wait for the future.
Any update on how this quarter is turning out to be given we are in end of May?
Yeah. It is going as per schedule. We are having a plan to do disbursement of about INR 1,000 crores. We want to maintain the momentum. We want to maintain the trend of doing more than INR 1,000 crores in a quarter. This trend will continue. Yes, we are taking a lot of efforts to arrest pre-closures and repayments. Mr. Raja rightly said it is a 25 years old company.
It's very difficult to manage prepayment and pre-closures. Yes, going forward, we'll be very aggressive in the disbursement. One thing I want to confirm you that for the sake of growth, we will not dilute our standards and underwriting standards and quality in the assets which is clearly seen from the performance in the new book. Yes, we are putting efforts to arrest pre-closures. Let's see. We are expecting the improvement in going forward.
Thank you.
Of course. Thank you for your question.
Thank you so much.
Thank you.
We'll again allow Vikas Kasturi of Focus Capital to ask his question. Vikas, would you like to go ahead now?
Yeah. Am I audible, moderator?
Yes, we can hear you. Please.
Yeah. Last time I did not get the unmute button. Sorry about that. Yeah. Sir, hearty congratulations on this great quarter and great financial year. Like you said, the highest ever disbursement on a quarterly basis as well as an annual basis. The GNPA also you brought it down, exactly like you said. Sir, I have been listening to all the questions and your answers as well, and I want to ask a question on the rundown itself, but I want to give you a data point, sir. From FY 2022 to FY 2026, so last four years, you have disbursed around INR 13,500 crores.
Right? But on slide number 25, our AUM from 2022 onwards is only INR 10,000 crores. Roughly about INR 3,000 crores of rundown has happened on the new book as well. That is about 25%. I am just saying, sir, rundown is happening not just on the legacy book, it is happening on the new book as well. While you've been saying because of vintage there is rundown, what explains the rundown in the new book, sir?
As I was saying, my customer profile being self-employed, I do get a lot of bullet payments or part prepayments. That is something that we cannot avoid and we are required to take it up. Your observation is right. Though there are no major pre-closures in the recent book, there are a lot of part prepayments, and that is what is being observed by your 25%.
Right, sir. Even in the past financial year, you have disbursed INR 1,100 crores, but the new book AUM has gone up by only about INR 800 crores. You can see that there is rundown even in the new book, which is happening, sir.
Yeah, you are right. Your data points are right. From an answering perspective, it dwells more on my principal repayment, upfront repayment because if it's a shorter term, my principal repayment will be faster, and also because of my part repayments. Because we allow part repayment even on the third month and fourth month of the loan, I cannot do much about it.
In addition to that, we are following a robust credit underwriting standards, legal scrutiny, valuation scrutiny, and all. Once my borrower approach any other financial institutions and say, I've taken a loan from Repco Home Finance, they will close their eyes and take. That's also lot of prepayments is because of our quality in the asset. We are getting a lot of prepayments or taken over by other institutions.
All right, sir. Thank you very much for your answers, sir. Once again, hearty congratulations to you.
Thank you.
Thank you. We have Pavan Kumar of Edelweiss with his question now. Pavan, please go ahead.
Hi, sir. Am I audible?
Yes.
Yeah, thank you for the opportunity, sir, and congratulations on good performance. I have two questions, one on disbursements, another one on the when we will see the GST reduction.
Yeah.
Pavan, we are unable to hear you.
On the disbursement, sir, when you say five, we will go to 250 branches. Just one second, sir. Hi, am I audible? Hello?
You are audible, but sir, we are not getting the full question. Can you please repeat it?
Yes, sir. When you say INR 5,000 crores of disbursement, you are saying you will do INR 1.67 crores, INR 1.7 crores per month from branch, right? That is approximately you are talking about less than 13 loans. You would have five, six relationship managers. Can you walk us through the numbers, how it will work out?
Okay. You are talking about per branch disbursement, right?
Per branch.
See, per branch per month disbursement, it depends on the branch category because we do have branches across the geographies like urban, semi-urban, and rural also. The same standard cannot be applied to all branches. Having said that, my average disbursement per branch per month is anywhere between INR 1.5 crore- INR 2 crore. In a given branch, I will be having one BSM and one BH. That is the kind of relationship our sales force that I have. We are in the process of improving the productivity also. I think we are at an optimum level, with one BH, one BSM, and maybe one runner boy or something like that, is what we are looking at INR 1.5 crores- INR 2 crores. Of course, this year you can look at increased productivity. Having said that is what we are aiming for. Yes.
Sir, can you give the split of that 1,600 employees that you have? Like how many of them would be in branches and how many of them would be actual sales managers? Or as you said, it is only 240 sales managers, one person per branch.
See, there are 240 branch heads.
Yeah.
Almost 180 branch sales managers.
Okay.
We do have a regional setup and a corporate office also. So the exact breakup, maybe I will pass it on to you through my team. Because credit vertical and operations vertical will have to do a full bifurcation. Anyway, I will share the data with you. From sales perspective, branch heads will be one per branch, as you rightly said. BSMs, we almost have 180 to 183 persons.
Sir. Okay. Basically two salespeople, right? Between branch head and sales manager.
Yeah.
And you are expecting them to do almost 10, 11 loans per month at INR 1.5 crore to INR 2 crore.
Yes.
Isn't that ask too much?
No. In our kind of organization, with our DNA, we are used to that kind of numbers. Because we have a branch, we have a processing setup also. They source and we have a team in the branch to process the files. It is possible and feasible.
Sourcing is entirely internal, right?
Yeah.
Sir, isn't hiring more salespeople a solution because all the other companies operate at three, four, five salespeople per branch, and then they are able to. Aptus is doing higher disbursements at a much lower AUM compared to you.
Yeah.
Their geographical footprint is almost similar to you.
Yeah. We can add on more salespersons, as you said. That is one of the approaches. But again, we are very conscious about our cost to income and overheads.
Sir, but your yields are so low. You say your self-employed is high, it is only 50%, another 53%. Your yield is lowest among the affordable housing finance people. I mean, if you can add employees, I see a great scope.
Yeah. We have noted. We already have it in the back of our mind, but it will take a bit of a time to get it implemented. Thanks for the notifications. Yes. We are noting it down. We will be working towards it.
Okay. My second question is on the stage two. Really great performance from bringing down to 7% from 9.7% last year. FY 2027 end stage two, can we look at something like a 4% kind of a number or a 3% kind of a number?
Actually, this is Vaidyanathan. Actually, we plan to reduce below 5%. Last year we have reduced around 2.7%.
Correct.
We wish to reduce below 5% at par with the industry. We hope we will reduce it more. We are having a separate collection team, and we have strengthened the collection verticals. Now we have started to focus on the rollback of accounts. Last year, if you say the absolute numbers, we have rolled back around INR 300 crores from INR 1410 crores to INR 1115 crores.
Correct.
This year also, we have assigned a separate vertical for reducing the flow from B0 to B1. The initial stage itself, we want to restrict. Going forward, we can reduce the stage two accounts below 5% before the end of this financial year.
Got it. Sir, can you explain the-
Pavan, sorry to cut you. If you have a follow-up question, please rejoin the queue. We have a few other participants as well.
No problem.
Thank you so much, Pavan. We have our next question coming in from Saurabh Dhole of FYERS Assets. Saurabh, please unmute and go ahead with your question.
Yeah. Thank you. Good evening. I just have one question with respect to the dividends. You had a payout ratio of about 10%, if I assume full year earnings of 74 EPS. What is the outlook that you have on the payout, or was that just a one time 25 year celebration because of which the payout was increased and it will now go back to its original trajectory?
We want to maintain this trend. It's not a one-off thing like other what I discussed in my conf call. As a management, we want to continue this trend.
Okay. Again, it will have an interim plus final kind of a pattern because typically Repco is in the just a final dividend is what generally-
That's what in mind. Right now, I'm not in a position to answer your question based on the numbers and other things, it will be decided. I'm in a position to give exact thing on next to my con call.
But we want to continue this trend. We don't want to go back.
Sure, sir. Thank you so much.
Thank you.
Thank you. We'll take our next question from Prithviraj Patil of Investec. Mr. Patil, please unmute. Yes, please go ahead. We can hear you, Mr. Patil. Please go ahead.
I just wanted to understand the pricing strategy and the cost of funds. If I look at cost of funds on a year-over-year basis, they have gone up by 10 basis points in a declining repo environment. Also if I look at the yields, the yield on assets that you report has gone up from an 11.7% in Q4 FY 2025 to around 12%. I just wanted to know our pricing strategy and how we think of yields going forward or the cost of funds going forward.
Shanthi, please.
Cost of funds side, we have been consistently reducing it from the 8.75% last financial year. We have brought it to 8.5%. So there is a consistent reduction in our cost of fund. Going forward, if at all repo is increased by RBI, our cost of fund might go up. Otherwise, not much of a change we expect. The yields side.
See, right now my yield is about 11.90%. It was about 12.07 in March 2025. Of course, we are following a risk-based pricing model. Majority of my borrowers are non-salaried class customer. We will ascertain based on the risk profile, the price will be determined. Do you know that we are sitting on a very tight and competitive environment? It is very difficult to maintain about 3.34%, the spread what we reported in previous quarters. To retain the good customer, case-by-case, we have to reduce our rate of interest, number one.
Number two, in this current financial year, we have reduced our benchmark rate twice. July 1st we have reduced 10 basis points, and again February 1st we have reduced our 10 basis points. All put together, we have seen reductions in the yield. Want to grow, it is not possible to maintain a good spread and growth. It will not come together. To grow, we need to sacrifice some portion in our spread. For current financial year, we would like to maintain a spread of in and around 3.2%- 3.25%.
Got it, sir. Thank you.
Thank you. We'll take a follow-up question from Saurabh Dhole of FYERS Assets. Saurabh, please go ahead.
Yeah. Sir, with respect to this NHB sanction that you have, basis this particular transaction, by how much will your cost of funds go down by?
We expect it might go down around 10- 15 basis, around.
Because of the first refinance we had to raise, we want to give priority in arranging a refinance from NHB. It is because we will get a cost benefit. Of course, the cost will be decided at the time of arrangement, what kind of book debts we are giving to them, whether it is affordable segment, non-affordable, whether it is urban, rural, so many factors are there. My guess is we will get a cost benefit of in and around 10 basis- 15 basis points immediately. That is my guess.
Okay. Overall cost of funds will go down by?
In overall cost of fund, our actual borrowing with public sector banks is around 80%. Public sector bank majority are the MCLR linked loans. Much of a reduction might not happen from that side, provided the repo gets raised they may also increase. I cannot give any indication at this moment. The NHB will help us with reducing the cost of funds for 10 basis points.
As I said, we are not expecting any reduction in bank borrowings. Yes, that NHB refinance will help me to reduce our cost of borrowings by at least 10 basis points is my guess. Next quarter, I am not expecting any reduction in cost of fund. Maintaining this cost of funds will be really challenging.
Got it. Okay, sir. Thank you.
Thank you.
Thank you. We will take our next question from Rajiv Mehta of YES Securities. Rajiv, please go ahead with your question. Rajiv, please unmute your mic.
Yeah. Can you hear me now?
Yes.
Sir, very quickly, I think you touched upon Karnataka that the growth has improved, but when I look at Q- on- Q growth as reported by you, it is 0% growth. Why and why it is not grown? There is another large market, which is AP, which is again growing very slowly. When you combine these two markets, they are 20% of the book. But the growth is not coming through in these markets.
When do we see when these geographies contributing towards growth and hence the overall disbursement number looking better? Or is it like we have not added enough people on the sales front in these markets, and which is why the growth is not coming about. You can just give us some idea about whether these geographies will come back to growth and whether they can incrementally add to your disbursement volume per month or on a per quarter basis.
Rajiv, I will take this question. When I am talking about Andhra Pradesh, yes, there was a requirement of team alignment which we have done in the last quarter. That is Q4, we have already done that, and we have put a specific leadership there. So this year I should see growth from that. On the Karnataka front, the e-Khata issue is now sizzling down, so I should expect a lot more growth from Karnataka. More than Karnataka, Andhra, and Telangana, now we are seeing very green shoots from my Maharashtra, Madhya Pradesh, and Rajasthan markets. So my non-TN is poised to give me good numbers for this year. Yeah, have I answered?
No, I get that. But I have not seen you adding more sales people, I think, operating in recent quarters because when I look at your total employee count in the last three quarters, I think it is stable. Is it the fact that you are waiting for more productivity to first manifest and then add people in certain regions? Are you even thinking about having two salespersons in a branch besides the branch head? See, the whole issue is that since you have a pretty high run rate of prepayment, partial prepayments, and then preclosures even from own money because of your customer profile, we need to push the disbursement run rate per month, per quarter much higher. For that, we will require people, we will require a pricing as a strategy, or maybe we will require new distribution. Can you please elaborate what will be
Yeah . Rajiv, non-TN branches now we have done a major rejig of all my branches. So we are looking at high-performance branches, and we have also put in place a city sales manager kind of a profile. Now we are looking at adding more feet on street. That is my direct sales team and others. We are looking at increasing my feet on street, which will be a low-cost grassroot level employee. Along with all these efforts, we expect the business to increase multifold in these regions, and which should be evident in the coming quarters. If not in Q1, at least in Q2, I am looking at a much, much higher contribution from non-TN states, Rajiv.
From which states? Non-TN.
Non-TN states.
Correct. Just one last thing from my side. Since you recovered a lot of NPAs and resolved them, roughly about INR 40 odd crore because INR 5 crore was a write-off, INR 40 crore was NPA resolution and recoveries. Were there any one-off interest recoveries also associated with it, which got booked in the revenue line in this quarter?
Interest recoveries from NPA business. We have done in lot of cases.
No, because you-
We have done.
But the block of NPA resolution was higher in this quarter of INR 40 crore. Generally, would the interest recovery element or number be much higher in this quarter?
Actually, Mr. Rajiv, you know well that we are following Ind AS. In Ind AS even NPA funds also we are recognizing as and when it is approved, institute approved. It is not like IRAC. IRAC now once account become NPA we will not recognize. What the NPA is already recognized, we have to reverse. In this case-
Okay. So you were already recognizing.
Right.
It is the recoveries net of provision.
Net of provision we recognize so that the impact will not be there. Because of recovering NPA, my revenue will not go up substantially.
Got it. I am done. I think if there are more questions, we can take one or two. Yeah.
Rajiv, due to paucity of time, we will take that as the last question for today. On behalf of Repco Home Finance Limited, this concludes today's conference call. Thank you all for joining us, and you can now click on the leave icon to exit the meeting.
Thank you.
Thank you all.
Thank you, Mr. Rajiv. Thank you for all participants for actively participating in this concall. Thank you.
Thank you.
Thank you, everyone.