Repco Home Finance says its business will be subdued for two quarters due to the impact of demonetisation, but is hopeful of getting back to 25-30 per cent growth curve from Q1 of the next fiscal year.

With an expected temporary hit in its business, it is likely to end the year with a growth of about 20 per cent, as against earlier projected level 25-30 per cent.

“There is a temporary set back in our segment, which is non-salaried class in Tier-2 and Tier-3 locations where cash dominates in transactions. Due to cash restrictions, people’s priority has shifted to managing day-to-day affairs. Also, there is no cash generation for them since their business is also affected,” R Varadarajan, Managing Director of Repco Home Finance, told BusinessLine .

His optimism on growth from coming fiscal stems from the fact that affordable housing segment, which the company caters to, will get a leg up from the Centre from existing programmes and new schemes.

“I expect the government to come out with some new schemes. Banks will be flush with funds. So, there is a possibility for cheaper interest rates for housing loans. Secondly, since the bigger industries are still facing demand challenges and might take little longer time to recovery, there will be a strong demand from small borrowers such as SMEs and affordable housing segments,” he points out.

Varadarajan also feels that there will be a price correction in the range of 10-20 per cent in property prices. Since the black money is curbed in the form of demonetisation and also benami transactions, land cost is likely to fall and thereby creating attractive prices for houses.

Repco Home Finance, which has a loan book size of about ₹8,469 crore, seeks to use the dull period to consolidate its business by way of educating its non-salaried customers about digital transactions and strengthening staff training.

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