Repco Home Finance Ltd Valuation Shifts to Fair Amid Market Volatility

Valuation Metrics and Recent Changes

As of 12 Jan 2026, Repco Home Finance Ltd trades at ₹414.95, down 1.52% from the previous close of ₹421.35. The stock’s 52-week range spans ₹307.95 to ₹463.60, indicating a moderate volatility band. The company’s price-to-earnings (P/E) ratio currently stands at 5.66, a figure that historically signalled strong undervaluation but now aligns with a “fair” valuation grade, as per MarketsMOJO’s latest assessment dated 23 Dec 2025. This represents a downgrade from the previous “attractive” rating, signalling a shift in market sentiment.

Alongside the P/E ratio, the price-to-book value (P/BV) is at 0.72, which remains below 1, traditionally a marker of undervaluation. However, this metric alone is insufficient to maintain an “attractive” valuation grade given the broader context of earnings growth and sector comparisons. The enterprise value to EBITDA (EV/EBITDA) ratio is 8.82, reflecting a moderate valuation relative to earnings before interest, taxes, depreciation, and amortisation.

Peer Comparison Highlights

When benchmarked against peers in the housing finance sector, Repco Home Finance’s valuation appears more reasonable but less compelling than before. For instance, PNB Housing Finance trades at a P/E of 11.79 and is rated “very expensive,” while Can Fin Homes and Aavas Financiers command P/E ratios of 12.96 and 23.48 respectively, both also classified as “very expensive.” In contrast, Repco’s P/E of 5.66 remains significantly lower, suggesting relative value.

However, the PEG ratio of 1.90 for Repco is higher than many peers, indicating that the stock’s price is less justified by its earnings growth prospects. For example, PNB Housing’s PEG ratio is 0.43 and Aptus Value Housing’s is 0.67, both suggesting better growth-to-price alignment. This elevated PEG ratio partly explains the downgrade in valuation grade from attractive to fair.

Financial Performance and Quality Metrics

Repco Home Finance’s return on capital employed (ROCE) stands at 10.36%, while return on equity (ROE) is 12.70%. These figures indicate moderate profitability and efficient capital utilisation, though they lag behind some sector leaders. The dividend yield of 1.57% offers a modest income stream, which may appeal to income-focused investors but is unlikely to be a primary driver of valuation.

The company’s enterprise value to capital employed ratio is 0.93, suggesting that the market values the firm slightly below its capital base, consistent with the fair valuation grade. Meanwhile, the EV to sales ratio of 7.98 reflects a reasonable premium over revenues, in line with sector norms.

Stock Performance Relative to Sensex

Repco Home Finance’s recent returns present a mixed picture when compared to the benchmark Sensex index. Over the past week, the stock declined by 3.88%, underperforming the Sensex’s 2.55% drop. However, over the last month, Repco gained 4.53%, significantly outperforming the Sensex’s 1.29% loss. Year-to-date, the stock has marginally increased by 0.50%, while the Sensex fell 1.93%.

Longer-term returns show a more nuanced trend. Over one year, Repco’s 1.79% gain trails the Sensex’s 7.67% rise. Yet, over three years, Repco has delivered a robust 73.29% return, nearly doubling the Sensex’s 37.58%. Over five years, the stock’s 64.86% return slightly lags the Sensex’s 71.32%. The ten-year performance is negative at -36.15%, contrasting sharply with the Sensex’s 235.19% gain, highlighting challenges in sustaining long-term growth.

Market Capitalisation and Mojo Score Insights

Repco Home Finance holds a market capitalisation grade of 3, indicating a mid-sized presence within the housing finance sector. Its overall Mojo Score is 55.0, categorised as “Hold,” an upgrade from the previous “Sell” rating as of 23 Dec 2025. This reflects improved investor confidence, albeit tempered by valuation concerns and sector headwinds.

The upgrade in Mojo Grade suggests that while the stock is no longer a sell, it does not yet warrant a buy recommendation. Investors should weigh the company’s fair valuation against its growth prospects and sector risks before committing capital.

Implications for Investors

The shift from an attractive to a fair valuation grade for Repco Home Finance Ltd signals a more cautious stance from the market. While the stock remains undervalued relative to many peers, the elevated PEG ratio and moderate profitability metrics suggest limited upside without a meaningful improvement in earnings growth or operational efficiency.

Investors should consider the company’s solid three-year performance and recent Mojo Grade upgrade as positive indicators. However, the subdued one-year and ten-year returns relative to the Sensex highlight the importance of a long-term perspective and diversification within the housing finance sector.

Given the current valuation and sector environment, Repco Home Finance may be suitable for investors seeking exposure to housing finance with a moderate risk appetite, but it is unlikely to be a high-growth stock in the near term. Monitoring quarterly earnings, asset quality, and interest rate trends will be critical to reassessing the stock’s attractiveness going forward.

Conclusion

Repco Home Finance Ltd’s valuation adjustment from attractive to fair reflects a nuanced market reassessment amid evolving financial metrics and peer comparisons. While the stock offers relative value in terms of P/E and P/BV ratios, its growth prospects and profitability metrics warrant a balanced approach. The recent Mojo Grade upgrade to “Hold” underscores this cautious optimism.

Investors should remain vigilant to sector developments and company-specific catalysts that could restore a more compelling valuation. Until then, Repco Home Finance represents a fair-value housing finance stock with moderate growth potential, best suited for those with a medium-term investment horizon.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →