BackHDFC Q2 profit rises 7% to Rs1,358 crore
Profit in line with analysts estimates
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Mumbai: Housing Development Finance Corp. Ltd (HDFC), India’s largest mortgage finance company, on Wednesday said fiscal second-quarter profit, excluding those of its units rose 7%.
Net profit rose to ₹ 1,358 crore in the three months ended 30 September from ₹ 1,266 crore in the year-earlier period. The profit was in line with a Bloomberg poll of 26 analysts, which had pegged it at ₹ 1,362 crore.
On a consolidated basis, net profit increased 9% to ₹ 2,064 crore from ₹ 1,891 crore in the year-earlier period.
HDFC has three major subsidiaries—HDFC Standard Life Insurance Co. Ltd, HDFC General Insurance and HDFC Asset Management Co. Ltd. Its main business is lending to individual home buyers and builders.
HDFC’s loan book increased to ₹ 2.12 trillion in the September quarter, up 15% from ₹ 1.85 trillion a year ago, it said in a statement.
On a stand-alone basis, total revenue increased 12% to ₹ 6,635 crore from ₹ 5,946 crore a year ago.
Vice-chairman and chief executive officer Keki Mistry said the quarter ended September was “business as usual" for the firm with loan demand from individuals continuing to be strong, the spread it makes on its loans maintained and non-performing assets (NPAs) on a downward trajectory.
HDFC’s total loan book increased 15% after taking into account the sale of loans during the quarter. HDFC does not retain all of the loans it originates; it sells a part of it to banks.
The firm sold ₹ 844 crore of loans in the three months ended September, while in the last 12 months the firm sold loans totalling ₹ 7,825 crore.
Individual loans continued to grow faster than the non-individual loan book, with such loans growing 16% after considering loans sold during the quarter; non-individual loans grew 11%.
Non-individual loans are funds extended to builders and developers, and have been depressed in the last few months as economic growth has dropped.
Mistry, however, said there have been early signs of a pick-up in non-individual loans in the September quarter. “In the quarter ended June, 14% of our incremental loans came from the non-individual segment. That ratio has now increased to 19% in the quarter ended but it is too early to say whether it is a start of a trend," Mistry said.
Mistry said though business sentiment has improved after the Narendra Modi-led government has taken charge at the centre, there could still be three to four quarters before it translates into investments on the ground. He, however, expects the investment climate to improve in the next few quarters.
Puneet Gulati, analyst at JM Financial Securities Ltd, said there were no surprises in HDFC’s results as all parameters were in line with expectations.
“Even a slight uptick in incremental loans from builders cannot be read as a trend because it’s just this quarter. These results are just in line with expectations," Gulati said.
HDFC’s gross NPAs as on 30 September stood at 0.69% of the loan portfolio, down from 0.79% a year ago. NPAs for the individual loans, at 0.53%, were lower than non-individual loans, which were at 1.02%.
On Wednesday, the firm’s shares gained 0.89% to close at ₹ 1,030.45 apiece on BSE, while the benchmark index Sensex gained 0.8% to close at 26,787.23 points.
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