EdelweissResearchisalsoavailableonwww.edelresearch.com,BloombergEDEL,ThomsonFirstCall,ReutersandFactset. EdelweissSecuritiesLimited

RepcoHomeFinance (RHF)earningsgrowth (consideringpretaxasFY15hasdeferredtaxprovisioninghit)opticallyseemslowerat21%YoYwhencompared with the 26% runrate during 9mFY15. However, this wasprimarilyowingtoprudentstanceofincreasingprovisioningcoverageto60%plusandhigheremployeecost.Operationally,businessmetricsandassetqualityperformancecontinued to impress.Keyhighlights:1)aftertheQ3FY15blip,disbursementsgained traction (up>45%YoY)resultingin 29% loan growth (9% QoQ); 2) GNPLs dropped by >60bps to 1.3%(seasonalinnature);and3)NIMsmaintainedtherobust4.5%mark.Thepotential to grow manifolds in underserved markets, further drawingsupportfromadequateCARof20%,willsustainRHFsloanCAGRof25%plusandhelp itpost impressive27%plusearningsCAGR,2.4%RoAand19%RoEoverFY1517E.MaintainBUY.DisbursementsperkupafterQ3FY15blipDisbursement,aftertheminorblipinQ3FY15(whenitgrewbymere7%YoY),gatheredtraction(up>45%YoY)inQ4FY15,feedinginto29%YoY/9%QoQgrowthinloanbook.The proportion of selfemployed segment where RHF has developed strong fortefurther inchedup to~57%.Gainingconfidence fromhugepotentialuntapped in thisunderserved segment, management expects to sustain the growth momentum inmediumtermtargetat2530%.WearebuildingloanCAGRof26%overFY1517EandexpectmixbetweensalariedselfemployedandhomeloanLAPtobebroadlystable.Assetqualityrobust,coveragerisesover60%Underpinnedbytargetcustomersegments(nonsalaried),RHFsNPLprofileisseasonalinnaturewithusualspikeseenduringQ1andQ3.However,thequantumofuptick/fallisstructurallydecliningwithhigherthrustonrecoveriesreducedvolatilityinGNPLs.IncontrasttohistoricaltrendofprovisioningreleaseinQ4,creditcostwaselevatedtoshoreupcoverage,aprudentmoveeventhoughfinalwriteoffcostsarelow.Outlookandvaluations:SuperiorsustainableRoA;maintain'BUY'RHFoperates inanichesegment,which isunderservedbybanksand largerhousingfinance companies (HFCs). In this backdrop, we expect the company to be keybeneficiaryofouroptimistic stanceon themortgage finance sector,givenemergingopportunities innonsalaried segmentandTier II/III locations.Thestock is tradingat3.5xFY17EP/ABVand19xFY17EP/E.RetainBUY/SOwithTPofINR770.

RESULTUPDATE

REPCOHOMEFINANCEGrowthregainsmomentum;assetqualityonstrongturf

EDELWEISS4DRATINGSAbsoluteRating BUYRatingRelativetoSector OutperformerRiskRatingRelativetoSector MediumSectorRelativetoMarket Overweight

MARKETDATA(R:RHFL.BO,B:REPCOIN)CMP :INR621TargetPrice :INR77052weekrange(INR) :725/369Shareinissue(mn) :62.4Mcap(INRbn/USDmn) :39/608Avg.DailyVol.BSE/NSE(000) :201.1

SHAREHOLDINGPATTERN(%) Current Q3FY15 Q2FY15

Promoters*

37.3 37.3 37.4MF's,FI's&BKs 16.0 16.5 16.3FII's 29.4 30.1 25.0Others 17.4 16.2 21.4*Promoterspledgedshares(%ofshareinissue)

: NIL

PRICEPERFORMANCE(%)

Stock NiftyEWBanksand

FinancialServicesIndex

1month (3.6) (3.0) (0.6)3months (6.5) (5.4) (6.5)12months 61.9 24.4 44.4

KunalShah+912240407579kunal.shah@edelweissfin.comNileshParikh+912240635470nilesh.parikh@edelweissfin.comPrakharAgarwal+912266203076prakhar.agarwal@edelweissfin.com

IndiaEquityResearch|BankingandFinancialServices

May19,2015

Financials (INRmn)YeartoMarch Q4FY15 Q4FY14 Growth(%) Q3FY15 Growth(%) FY15E FY16E FY17ENetInterstInc. 746 589 26.6 636 17.3 2,382 3,024 3,802PAT 349 315 10.7 307 13.4 1,231 1,610 2,026BVpershare 130 153 183DilutedEPS 19.7 25.8 32.5P/AdjBook(x) 4.9 4.2 3.5DilutedP/E(x) 31.4 24.0 19.1

BankingandFinancialServices

2 EdelweissSecuritiesLimited

NIMsstablederivingsupportfromlowerfundingcostsNIMswerestableat4.5%benefiting fromtheover25bpsQoQdecline in fundingcostsasthecompanydiversified itsborrowingprofileand tapped lowercost fundingsources (viz.,NCDs , CPs, raised INR1.6bn through these routes during the quarter),which alongwithlowerbankfundingrate(baseratemaybeprunedbybanks)reducedthefundingcost.Ontheotherhand,thistoanextentwasoffsetby loweryieldsbysimilaramount(to12.5%).Given the niche created in selfemployed category, we expect RHF to sustain yields.However, as the interest rate tables turns and banks prune base rate (already visible inQ1FY16),weexpectfundingcosttoeaseinturnaidingNIMs.Otherhighlights Operating expenses during the quarter was higher at INR155mn (up 36% YoY/15%

QoQ)thegrowthwaslargelyduetohigherstaffexpenses(up54%YoY/24%QoQ)astherewasprovisiononperquisiteaccruingfromESOPallocation(althoughthere isnocashithadtoprovideINR80mnforfullyearFY15).Besides,quarterlyadjustmenttoDAinFebruaryalsoledtosomeuptickinsalarycost.

Table1:Highercontributionfromnonsalaried,RHFsstrongforte

Source:Company

Table2:SeasonaldipinGNPL,evenbelowQ4FY14level (%)

Source:Company

Table3:Marginsstablederivingsupportfromlowerfundingcost

Source:Company

Table4:BorrowingmixraisedINR1.6bnfromNCDsandCPsduringthequarter (%)

Source:Company

Loancomposition(%) Q314 Q414 Q115 Q215 Q315 Q415NonSalaried 54.5 55.0 55.3 55.7 55.9 56.8Salaried 45.5 45.0 44.7 44.3 44.1 43.2Loanmix(%)Individual HomeLoans 82.5 81.3 80.8 80.5 80.7 80.8Loans againstProperty 17.5 18.7 19.2 19.5 19.3 19.2

Q314 Q414 Q115 Q215 Q315 Q415Gross NPA 2.0 1.5 2.5 1.7 2.0 1.3NetNPA 1.3 0.7 1.6 0.8 1.2 0.5ProvisionCoverage 37.4 51.0 35.7 51.5 42.1 62.0

(%) Q314 Q414 Q115 Q215 Q315 Q415Yield 12.6 12.6 12.6 12.7 12.8 12.5CostofDebt 9.4 9.3 9.8 9.8 9.9 9.6Spread 3.2 3.3 2.8 3.0 2.9 2.9NIM 4.6 4.7 4.4 4.5 4.5 4.5

Q314 Q414 Q115 Q215 Q315 Q415Banks 64.7 65.0 64.0 69.0 72.0 67.6National HousingBank 26.0 25.0 26.0 22.0 20.0 21.4RepcoBank 9.3 10.0 10.0 9.0 9.0 7.9NCDs 2.0CPs 1.2

RepcoHomeFinance

3 EdelweissSecuritiesLimited

Financialsnapshot (INRmn)YeartoMarch Q4FY15 Q4FY14 %change Q3FY15 %change FY15 FY16E FY17EInterestincome 1,913 1,498 27.8 1,756 9.0 6,699 8,535 10,753Interestexp 1,168 909 28.5 1,120 4.2 4,318 5,511 6,951Netint.inc.(INRmn) 746 589 26.6 636 17.3 2,382 3,024 3,802Otherincome 1 1 0.0 1 27.3 231 295 363Operatingexpenses 155 114 35.9 135 15.3 547 652 774Staffcosts 105 69 53.7 85 23.7 547 652 774Otheroperatingexpenses 50 46 9.2 50 0.8 183 218 258Provisions 62 41 51.7 26 136.5 203 246 345Depreciation 10 7 49.2 7 32.9 30 35 42Profitbeforetax 520 429 21.3 469 10.9 1,862 2,421 3,046Tax 171 114 50.5 161 6.3 631 811 1,021Profitaftertax 349 315 10.7 307 13.4 1,231 1,610 2,026Loanbook(INRmn) 60,129 46,619 29.0 55,007 9.3 60,129 76,735 96,689Sanctions 8,345 5,376 55.2 5,243 59.2 23,989 29,986 37,483Disbursements 7,505 5,120 46.6 4,749 58.0 21,812 26,828 32,999GNPLs 1.3 1.5 2.0 1.3 1.5 1.6NNPLs 0.5 0.7 1.2 0.5 0.6 0.6Provisioncoverage(%) 62.1 51.0 42.1 62.1 60.0 60.0

BankingandFinancialServices

4 EdelweissSecuritiesLimited

Q3FY15earningsconcalltakeawaysWithrespecttogrowthmetrics Disbursementduringthequarterwerelowerfollowing1)lowerdrawdownsfromthe

sanctions pool (large part of the sanctions happened in last week of Decembercorrespondingtowhichdisbursementhasnothappened)and2)higherbase.However,goingintoJanuarythedisbursementshasnormalizedandmanagementexpectstotracknormalizedgrowthinQ4FY15(20%disbursementgrowthpossible).

LAPbooktobemaintainedataroundcurrentlevels(~20%),havecomfortableLTVof50%inthissegment.GNPLinLAPis2.9%(normalizedcreditcostis~50bps)

Intermsofgrowthfromnonsouthernmarket:Maharashtraisdoingwell,howeverMP,Orissaarecontributingtothegrowth,howeverthecontribution isnotverysignificantascompanyhasnotbeenveryaggressiveascurrentlytheyareintheevaluationmode.

Slowdownhasbeenhappening in themajor cities inSouth suchasChennai,Cochin,Trichy etc. However as the company has 2/3rd of the business comes from othercitiessocompanyisconfidentofmaintainthegrowthrate.

Loanbookgrowthtobemaintainedwithin2530%overmediumtolongerterm.WithrespecttoNIMs Aimstomaintainofspreadof3%plusandNIMsof4%plus. Raised INR500mnthroughCPsrecentlyat8.6%.Going forwardmanagementexpect

further INR500mnofCP issuanceduringthequarterandalsotapNCDsrouteduringthequarter.

Costoffundshas increasedowingtochange inNHBrequirement(cappingonlendingyieldto200bps)hasmadecompanytoshifttohighercostborrowingfromthebanks.

Otherhighlights Planstoexpandthebranchnetworkby15branches/year,with1/3rdinnonsouthern

regionand2/3rdinsouthernregion. Cost/income ratio was at 20% (including ESOPs) and 18% ( excluding ESOPs).

Managemntexpectstotracebackcosttoincomeratioof18%(includingESOPs). In terms of geographical presence: part of theGNPLswere coming from Kerela and

TehelganaandincrementallyinOrissaandWestBengal.Datapoints DisbursementduringthequarterinHLwereINR3.81bnandinLAPINR940mn IncrementalticketsizeinhomeloanINR1.43mn,Homeequity:INR2.3mn.Intermsof

salariedincrementalticketsizeisINR1.16mn,andnonsalaried:INR1.98mn. Employees:534 AvgticketsizeINR1.2mn. Yieldsintheretailhomeloan:12.1%,LAPat15.9% 6%istheprepaymentratenoincreasedwitnessedoverpast9months. Plot loansaccount for5%of the loanbookwith the requirement thatconstruction

shouldbeginwithin36months.

RepcoHomeFinance

5 EdelweissSecuritiesLimited

Q2FY15earningsconcalltakeawaysRepcoHomeFinancereportedPATofINR327mninQ2FY15(growthof12%YoY/32%QoQ)betterthanourexpectationofINR310mn.BeatwasnotonlyduetolowercreditcostbutalsoledbyhigherNII.Netinterestincomegrew21%YoY/9%QoQtoINR638mnandloanlossprovisioningwaslower7080%bothYoYaswellasQoQ. Assetquality improvedsignificantlywithGNPLscomingdown from2.49% inQ1FY15

to1.65%inQ2FY15.Ithasalsoimprovedprovisioningcoverageto51.5%. GNPLsinhomeloan1.59%inQ2FY15(2.31%inQ1FY15)andinhomeequityof1.89%

(3.25%) Addedmorestaffduringthequarterto490andannualpromotionhasstarted Yield inhome loan12.1%andhomeequity15.9%similarto levelinQ2FY14.Uniform

interestratefollowedacrossthecountry. Innewmarkets,growthmaynotbeashighasSouthernmarketsasittryingtoestablish

itsbrandintheseplace.Outlook Guidanceof3%spreadand4%NIM Wouldwanttotakeprovisioningcoverageto70%byendofthisfiscal Sustainableloangrowthofatleast25% Will diversify borrowing profile and tapCPmarketdefinitelybefore the endof this

fiscal.Someinternalprocess RoAat2.5%andRoEsexpectedtogoupduetogearingwillmovetopreIPOlevelover

themediumterm.

BankingandFinancialServices

6 EdelweissSecuritiesLimited

CompanyDescriptionRepcoisahousingfinancecompanyregisteredwiththeNHBandheadquarteredinChennai,Tamil Nadu. It is promoted by the Government of Indiaowned The RepatriatesCooperative Finance andDevelopment Bank (Repco Bank) andwas incorporated inApril2000.Keypointtohighlightisthatthepromoterisaregisteredcooperativesociety.As of March 2015, RHF had 146 branches and satellite centres located in Tamil Nadu,Karnataka, Andhra Pradesh, Kerala, Maharashtra, Odisha, West Bengal, Gujarat and theUnionTerritoryofPuducherry.Further, two thirds of its centres are located in Tier 2 and Tier 3 cities. The companysmarketingstrategyconsistsofadvertisingvialoancampsandwordofmouthreferralsfromexistingcustomers.Asa result,mostof itscustomersarewalkinsand thecompanydoesnot use marketing intermediaries. Branches source loans and carry out the preliminarychecks on credit worthiness of the borrower, post which the application is sent to thecentralised processing unit for approval. Branches are also responsible for assistance indocumentation,disbursingloansandinmonitoringrepaymentsandcollectionsInvestmentRationaleRepcoHomeFinance(Repco)hascreatedanichefor itself,servicingbothsalariedandselfemployed category in TierII and TierIII a customer segment leftunderservedby largehousingfinancecompaniesandbanks.Welikethecompanyforitsdifferentiatedapproach,strongriskmanagementpractisesandmostimportantlyforitsscalablebusinessmodelandsuperiorandsustainablereturnratios.

KeyRisks Slowdown in real estate sector:Repco ismainlypresent in8 states.Currently,over

60%of its loanbook is coming fromTamilNadualone.Any slowdown in realestatesector,especiallyinTamilNaduwillhavenegativeimpactongrowthandearnings.

Regulatory risk: Repco isregulatedbyNationalHousingBank (NHB),awhollyownedsubsidiary of the Reserve Bank of India (RBI). Adverse regulatory change will havenegativeimpactonthegrowthandprofitabilityofthecompany.

7 EdelweissSecuritiesLimited

RepcoHomeFinanceFinancialStatements

Incomestatement (INRmn)YeartoMarch FY14 FY15 FY16E FY17EInterestincome 5,168 6,699 8,535 10,753Interestexpended 3,248 4,318 5,511 6,951Netinterestincome 1,920 2,382 3,024 3,802 Fee&forex income 186 231 295 363Netrevenues 2,106 2,613 3,319 4,165Operatingexpense 388 547 652 774 Employeeexp 211 335 399 473 Depreciation/amortisation 24 30 35 42 Otheropex 153 183 218 258Preprovisionprofit 1,718 2,065 2,667 3,392Provisions 227 203 246 345ProfitBeforeTax 1,491 1,862 2,421 3,046Less:ProvisionforTax 390 631 811 1,021ProfitAfterTax 1,101 1,231 1,610 2,026ReportedProfit 1,101 1,231 1,610 2,026BasicEPS(INR) 17.5 19.7 25.8 32.5No.ofDilutedsharesoutstanding 62 62 62 62DilutedEPS(INR) 17.5 19.7 25.8 32.5Dividendpershare(DPS) 1.2 1.5 2.6 3.2DividendPayoutRatio(%) 6.8 7.5 10.0 10.0

Growthratios(%) YeartoMarch FY14 FY15 FY16E FY17ERevenues 50.1 24.1 27.0 25.5NIIgrowth 52.7 24.0 27.0 25.7Opexgrowth 59.7 41.1 19.2 18.6PPPgrowth 48.1 20.2 29.1 27.2Provisionsgrowth 145.6 (10.3) 20.9 40.4AdjustedProfit 37.6 11.8 30.8 25.8

Operatingratios YeartoMarch FY14 FY15 FY16E FY17EYieldonadvances 12.5 12.5 12.5 12.4Netinterestmargins 4.6 4.5 4.5 4.4Costoffunds 9.2 9.5 9.4 9.3Spread 3.3 3.0 3.0 3.1Costincome 18.4 21.0 19.7 18.6Taxrate 26.2 33.9 33.5 33.5

KeyAssumptions YeartoMarch FY14 FY15 FY16E FY17EMacro GDP(YoY%) 6.9 7.4 8.0 8.7Inflation(Avg) 9.5 6.7 5.0 5.0Reporate(exitrate) 8.0 7.5 6.8 6.5USD/INR(Avg) 60.5 61.0 62.0 62.0Sector Creditgrowth 14.0 12.0 15.0 17.0Bank'sbaserate(%) 9.5 9.3 9.2 9.2Wholesaleborrowingcost(%) 9.0 8.8 8.5 8.5Gsecyield 7.6 7.8 7.3 7.0Company Yieldonadvances 12.5 12.5 12.5 12.4Costoffunds 9.2 9.5 9.4 9.3Spread 3.3 3.0 3.0 3.1Employeecostgrowth 49.3 59.1 19.2 18.6Otheropexgrowth 76.7 19.2 19.2 18.6Dividendpayout 6.8 7.5 10.0 10.0Taxrate(%) 26.2 33.9 33.5 33.5Balancesheetassumption(%) Disbursementgrowth 46.9 27.2 23.0 23.0Repayment/prepaymentrate 15.5 15.5 15.5 15.5GrossNPLs 1.5 1.3 1.5 1.6NetNPLs 0.7 0.5 0.6 0.6

8 EdelweissSecuritiesLimited

BankingandFinancialServices

Peercomparisonvaluation Marketcap DilutedPricetoEarnings PricetoBookRatio ReturnonAverageEquityName (USDmn) FY16E FY17E FY16E FY17E FY16E FY17ERepcoHomeFinance 608 24.0 19.1 4.0 3.4 18.2 19.3DewanHousingFinance 981 8.0 6.4 1.2 1.0 15.4 16.9HDFC 30,675 28.6 24.4 6.1 5.5 22.6 23.9IndiabullsHousingFinance 3,155 8.8 7.7 2.8 2.5 34.5 34.6LICHousingFinance 3,351 12.6 10.7 2.1 1.9 18.2 18.6MagmaFincorp 301 12.5 9.9 1.2 1.1 11.2 11.3Mahindra&MahindraFinancialServices 2,420 12.7 11.4 2.4 2.1 19.9 19.3ManappuramGeneralFinance 445 8.9 7.1 1.0 0.9 11.5 13.2MuthootFinance 1,195 9.1 7.4 1.4 1.2 15.6 17.4PowerFinanceCorp 5,608 5.0 4.4 0.9 0.8 20.1 19.7RelianceCapital 1,627 10.5 9.1 0.7 0.7 6.5 7.2RuralElectrificationCorporation 4,632 4.6 4.1 1.0 0.9 22.9 21.4ShriramCityUnionFinance 1,841 16.4 13.1 2.5 2.2 16.3 17.7ShriramTransportFinance 14.3 12.1 1.9 1.7 13.7 14.4Median 11.5 9.5 1.6 1.4 17.2 18.2AVERAGE 12.6 10.5 2.0 1.8 17.1 17.7

Source:Edelweissresearch

RoEdecomposition(%) YeartoMarch FY14 FY15 FY16E FY17ENetinterestincome/assets 4.6 4.5 4.5 4.4Netrevenues/assets 5.0 4.9 4.9 4.8Operatingexpense/assets 0.9 1.0 1.0 0.9Provisions/assets 0.5 0.4 0.4 0.4Taxes/assets 0.9 1.2 1.2 1.2Totalcosts/assets 2.4 2.6 2.5 2.5ROA 2.6 2.3 2.4 2.4Equity/assets 16.4 14.6 13.1 12.2ReturnonAverageEquity(ROAE) 16.0 15.8 18.2 19.3

Valuationparameters YeartoMarch FY14 FY15 FY16E FY17EAdjustedDilutedEPS(INR) 17.5 19.7 25.8 32.5YoYgrowth(%) 38.0 12.7 30.8 25.8Bookvaluepershare(INR) 119.2 130.2 153.5 182.7Adjustedbookvaluepershare 115.4 126.8 148.5 175.8DilutedPricetoEarningsRatio 35.4 31.4 24.0 19.1PricetoBookRatio(P/B)(x) 5.2 4.8 4.0 3.4Price/Adj.BV(x) 5.4 4.9 4.2 3.5DividendYield(%) 0.2 0.2 0.4 0.5

Balancesheet (INRmn)Ason31stMarch FY14 FY15 FY16E FY17ESharecapital 622 624 624 624Reserves&Surplus 6,789 7,498 8,946 10,770Shareholders'funds 7,411 8,121 9,570 11,393Shorttermborrowings 9,912 12,966 16,786 21,293Longtermborrowings 29,108 38,078 49,295 62,530TotalBorrowings 39,020 51,044 66,081 83,823LongTermLiabilities&Provisions 557 749 737 928DeferredTaxLiability(net) (187) 342 487 675Sourcesoffunds 46,802 60,257 76,874 96,820GrossBlock 135 135 135 135NetBlock 48 86 86 86IntangibleAssets 2 3 3 3TotalFixedAssets 50 89 89 89Noncurrentinvestments 124 124 81 81Cashandcashequivalents 219 175 460 580Loans&Advances 46,811 60,368 76,735 96,689OtherCurrentLiabilities&Short 402 500 491 619TotalCurrentLiabilities& 402 500 491 619NetCurrentAssets(excash) (402) (500) (491) (619)Usesoffunds 46,802 60,257 76,874 96,820BookValuepershare(INR) 119.2 130.2 153.5 182.7

9 EdelweissSecuritiesLimited

RepcoHomeFinance

HoldingTop10Perc.Holding Perc.Holding

SmallcapWorldFund 6.48 CapitalWorldInvestors 6.11TempletonAssetManagement 3.84 SBIFundsManagement 3.29ParvestEquityIndia 3.13 BNPParibasInvestmentPartners 3.13BirlaSunLifeAssetManagement 3.09 IndiaCapitalFund 3.09GranthamMayoVanOtterloo 2.70 GoldmanSachs AssetManagement 2.22

*asperlastavailabledata

InsiderTrades ReportingData Acquired/Seller B/S QtyTraded27Oct2014 CreadorI,LLC Sell 3105000.0022Aug2014 FirstCarlyleGrowthVI Sell 11027721.00

*inlastoneyear

BulkDeals Data Acquired/Seller B/S QtyTraded Price29Oct2014 CreadorILlc Sell 399434 470.0720Oct2014 CreadorILlc Sell 325000 470.05

*inlastoneyear

AdditionalDataDirectorsDataT.S.KrishnaMurthy Chairman R.Varadarajan ManagingDirectorB.Anand Director ThomasPaulDiamond DirectorG.R.Sundaravadivel Director V.Nadanasabapathy DirectorKKPathak Director SanjeevaneeKutty Director

AuditorsR.SubramanianandCompany

*asperlastannualreport

10 EdelweissSecuritiesLimited

Company Absolutereco

Relative

reco Relative

riskCompany Absolute

recoRelative

recoRelative

RiskAllahabadBank BUY SP M AxisBank BUY SO MBajajFinserv BUY SO L BankofBaroda BUY SP MDCBBank BUY SO M DewanHousingFinance BUY SO MFederalBank BUY SO L HDFC HOLD SU LHDFCBank BUY SO L ICICIBank BUY SO LIDFC BUY SO L IndiabullsHousingFinance BUY SO MIndusIndBank BUY SO L KarnatakaBank BUY SP MKotakMahindraBank HOLD SU M LICHousingFinance BUY SO MMagmaFincorp BUY SO M Mahindra&MahindraFinancialServices HOLD SU MManappuramGeneralFinance BUY SP H MaxIndia BUY SO LMultiCommodityExchangeofIndia BUY SO M MuthootFinance BUY SO MOrientalBankOfCommerce BUY SP L PowerFinanceCorp BUY SO MPunjabNationalBank BUY SP M RelianceCapital BUY SP MRepcoHomeFinance BUY SO M RuralElectrificationCorporation BUY SO MShriramCityUnionFinance BUY SP M ShriramTransportFinance HOLD SP MSouthIndianBank BUY SP M StateBankofIndia BUY SO LUnionBankOfIndia BUY SP M YesBank BUY SO M

RATING&INTERPRETATION

ABSOLUTERATINGRatings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVERETURNSRATINGRatings Criteria

Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe within the sector

RELATIVERISKRATINGRatings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTORRATINGRatings Criteria

Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return

11 EdelweissSecuritiesLimited

RepcoHomeFinance

EdelweissSecuritiesLimited,EdelweissHouse,offC.S.T.Road,Kalina,Mumbai400098.Board:(9122)40094400,Email:research@edelweissfin.com

NiravShethHeadResearchnirav.sheth@edelweissfin.comCoveragegroup(s)ofstocksbyprimaryanalyst(s):BankingandFinancialServicesAllahabadBank,AxisBank,BajajFinserv,BankofBaroda,DCBBank,DewanHousingFinance,FederalBank,HDFC,HDFCBank,ICICIBank,IDFC,IndiabullsHousingFinance,IndusIndBank,KarnatakaBank,KotakMahindraBank,LICHousingFinance,MaxIndia,MultiCommodityExchangeofIndia,ManappuramGeneralFinance,MagmaFincorp,Mahindra&MahindraFinancialServices,MuthootFinance,OrientalBankOfCommerce,PunjabNationalBank,PowerFinanceCorp,RelianceCapital,RuralElectrificationCorporation,RepcoHomeFinance,StateBankofIndia,ShriramCityUnionFinance,ShriramTransportFinance,SouthIndianBank,UnionBankOfIndia,YesBank

DistributionofRatings/MarketCapEdelweissResearchCoverageUniverseRatingDistribution* 155 45 8 208*stocksunderreviewMarketCap(INR) 151 54 3

Date Company Title Price(INR) RecosRecentResearch

15May15 MagmaFincorp

GrowthrationalisationstrategytoaidRoAs;ResultUpdate

94 Buy

14May15 MultiCommodityExchange

Backinthereckoning;ResultUpdate

1,053 Buy

14May15 ManappuramFinance

Growthsustainsmomentum;NIMdiprestrictsrevenue;ResultUpdate

35 Buy

>50bn Between10bnand50bn

12 EdelweissSecuritiesLimited

BankingandFinancialServicesDISCLAIMER

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The investmentdiscussedor views expressedmaynotbe suitable for all investors. Thisinformation is strictly confidential and is being furnished to you solely for your information. 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