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HDFC disbursements rise in Q2

HDFC disbursements rise in Q2
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First Published: Tue, Oct 13 2009. 12 44 AM IST

Updated: Tue, Oct 13 2009. 12 44 AM IST
HDFC’s quarterly results offer an opportunity to gauge whether there has been a revival in housing loans. During the September quarter, loan approvals were up 13.9% compared with the same period last year, while disbursements increased by 29%. In contrast, loan approvals were up 23% on a year-on-year (y-o-y) basis during the June quarter, while disbursements increased by 21%.
While the growth in loan approvals has slowed, analysts point out that the second quarter is usually a slow one for housing growth.
Taking loans sold into consideration, the y-o-y growth in loans to individuals rose by 15.4%, while loans to corporate bodies, albeit on a much lower base, went up by 25.8%. But this is unlikely to be the trend going ahead, as growth in individual housing loans starts to pick up. On a sequential basis, compared with the June quarter, the growth in individual loan approvals and disbursements for the second quarter of this financial year has been 26% and 24% respectively.
Graphics: Yogesh Kumar / Mint
During the September quarter, interest on loans was lower than in the June quarter, on account of lending rate cuts. But interest charges too were much lower, as a result net interest income was higher. The firm has been able to maintain spreads during the quarter.
Higher dividend income and fees also helped boost earnings, as did profit on sale of investments. The company also kept a tight leash on expenditure—for example, staff expenses during the quarter were lower than in the year ago period.
The upshot was a 24.2% y-o-y rise in net profit in the September quarter, compared with a 20.6% increase during the June quarter. The firm’s asset quality remains excellent, at 0.95% compared with 0.98% at June-end.
But HDFC is not just a mortgage lender—much of its value comes from being a holding company. Analysts say that HDFC Bank’s substantial branch expansion, which will increase the scope for selling HDFC products, has been a positive for the stock. Similarly, any progress on increasing foreign investment limits for insurance will act as another kicker.
Write to us at marktomarket@livemint.com
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First Published: Tue, Oct 13 2009. 12 44 AM IST