Mumbai: India’s largest mortgage company Housing Development and Finance Corp. Ltd (HDFC), which is 12.2% owned by Citigroup Inc. , on Thursday reported a 56.21% rise in its third quarter net profit, aided by a 25% rise in its loan portfolio.
Strong growth: HDFC chairman Deepak Parekh
During the quarter, HDFC made a pre-tax gain of Rs120.94 crore on the sale of a part of its investment in its unit, HDFC Standard Life Insurance Co Ltd. Inclusive of this, HDFC’s net stood at Rs648.93 crore—a growth of 83%. Post tax, HDFC gained Rs93.61 crore from the 7.15% stake sale in HDFC Standard Life Insurance Co.,to its joint venture partner Standard Life Plc. of the UK.
Excluding the transaction, HDFC’s net profit for the third quarter rose to Rs555.32 crore, from Rs355.49 crore in the year-ago period.
Loans for the period, including investments in debentures for financing real estate-related projects, were Rs68,151 crore, against Rs54,633 crore in the year-ago period.
Total income, excluding profit on sale of investments, rose 47.81%, to Rs2,154.72 crore, from Rs1,457.73 crore from the same quarter last fiscal.
“Despite hardening in interest rate in the last two-three quarters, the company has come up with a commendable result, which speaks a lot about its management,” said Ashok Jainani, vice-president and head of research at Khandwala Securities Ltd, a Mumbai-based domestic brokerage.
The company’s total assets for the quarter ended 31 December increased by 28%, to Rs75,240 crore, compared with Rs58,888 crore in the year-ago.
The mortgage lender’s gross non-performing loans fell to 1.12% of the loan portfolio, as against 1.26% in the year-ago quarter.
Demand for homes remained strong even after the Reserve Bank of India raised interest rates nine times since October 2004 as salaries rise in Asia’s third largest economy.
Home buyers in India, where the economy is poised to grow at least 9% for the third straight year, can deduct as much as Rs150,000 for mortgage interest payments from their taxable annual income.
On Friday, HDFC stock closed down 1.05%, to Rs2,819.8, even as the Bombay Stock Exchange’s benchmark equity index Sensex dropped 3.49%.
M.C. Govardhana Rangan and Sumit Sharma of ‘Bloomberg’ contributed to this story.