HDFC Q2 profit rises 14% to Rs1,826.50 crore

HDFC provided Rs731 crore against tax during the July-September quarter, inclusive of deferred tax liability worth Rs103 crore, against a special reserve


HDFC’s total loan book rose 17% to Rs2.75 trillion from a year earlier. Photo: Pradeep Gaur/Mint
HDFC’s total loan book rose 17% to Rs2.75 trillion from a year earlier. Photo: Pradeep Gaur/Mint

Housing Development Finance Corp. Ltd (HDFC) on Wednesday said fiscal second-quarter profit rose 14% from a year earlier on higher revenue.

Net profit rose to Rs1,826.50 crore in the quarter ended 30 September from Rs1,604.56 crore a year ago.

Interest and non-interest income combined rose 9% to Rs8,091 crore. HDFC’s total loan book rose 17% to Rs2.75 trillion from a year earlier, according to the company’s statement of accounts.

Individual loan disbursements grew by 20% during the half-year ended September, the company said in a statement. The average size of individual loans stood at Rs25.7 lakh. The non-individual loan book rose 13% year-on-year. As of 30 September, total assets under management (AUM) stood at Rs3.11 trillion.

The company provided Rs731 crore against tax during the July-September quarter, inclusive of a deferred tax liability worth Rs103 crore, against a special reserve. HDFC had provided Rs719 crore during the same period last year.

Gross non-performing loans as of the end of the second quarter amounted to Rs2,108 crore. This is equivalent to 0.76% of the loan portfolio, HDFC said in its statement. Non-performing loans in the individual portfolio stood at 0.61% while those in the non-individual portfolio stood at 1.11%.

According to National Housing Board (NHB) norms, the corporation is required to carry a total provision of Rs2,106 crore, of which Rs1,435 crore is against standard assets, the statement said.

“For 2QFY17, HDFC reported net profit of Rs18.3bn, up 14% YoY and tad ahead of our estimates. The key positive was the healthy growth in AUMs as well as loans; home loans continue to grow well and corporate loan growth has also picked-up,” Aashish Agarwal and Prakhar Sharma, analysts at CLSA India, wrote in a note.

“The company continues to focus on growth over NIM (net interest margin) which is leading to pressure on profitability. Provisions were a bit higher than expected and we would need to discuss the same with HDFC’s management,” Nischint Chawathe, institutional equities analyst at Kotak Securities, wrote in a note.

HDFC Bank shares fell 0.8% to Rs1,240.40 at the close of trading on BSE on Wednesday, while the Sensex fell 0.91% to 27,836.51 points.

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