Housing Development Finance Corporation’s standalone financial results came in line with market expectations, with net profit in the reporting quarter (October-December 2016) rising 12 per cent to ₹1,701.21 crore as against ₹1,520.51 crore in the year-ago period.
Net profit in the reporting quarter was, however, lower than in the preceding two quarters (₹1,826.50 crore in July-September and ₹1,870.73 crore in April-June). This is mainly due to a 72 per cent jump in provision for contingencies at ₹117 crore (₹68 crore in the year-ago quarter).
Income from operations was up 13 per cent year-on-year (y-o-y) at ₹8,134 crore. Finance cost rose 10 per cent to ₹5,286 crore.
As at December-end 2016, the loan book grew 16 per cent to ₹2,86,876 crore (₹2,48,097 crore in the year-ago period). HDFC, under the loan assignment route, sold individual loans amounting to ₹3,355 crore in the reporting quarter to HDFC Bank.
On an assets under management (AUM) basis, growth in the individual loan book was a tad slower at 17 per cent (18 per cent in the preceding quarter) and it was higher in the case of non-individual loan book at 19 per cent (13 per cent). The average size of the individual loans increased to ₹25.70 lakh as at December-end 2016 from ₹25 lakh as at December-end 2015.
The spread on loans over the cost of borrowings for the nine months ended December 31, 2016, improved a tad to 2.34 per cent as against 2.31 per cent in the corresponding year-ago period.
The spread on the individual loan book was higher at 2.02 per cent (1.97 per cent in the year-ago period) while it was unchanged at 3.09 per cent on the non-individual loan book. Net interest margin for the nine months improved to 3.95 per cent (3.85 per cent in the year-ago period).
Non-performing loans As at December-end 2016, gross non-performing loans (GNPLs) amounted to ₹2,341 crore (₹1,794 crore as at December-end 2015). This is equivalent to 0.81 per cent (0.72 per cent) of the loan portfolio.
The unrealised gains on HDFC’s listed investments amounted to ₹66,851 crore (previous year: ₹59,091 crore; and preceding quarter ended September, 2016: ₹70,641 crore). This excludes the appreciation in the value of unlisted investments.
Siddharth Purohit, Senior Equity Research Analyst, Angel Broking, said: “HDFC’s Q3 FY17 results were broadly in line with expectations. Loan growth was marginally better than expected on the back up higher growth from non-individual loans.
“GNPLs saw a marginal rise and consequently there was rise in provisions, but we don’t see that as a cause of concern. With lending rates now becoming attractive, the individual loan book should see a pick-up in demand in the coming quarters.”
HDFC shares closed at ₹1,368.90 apiece, down 0.13 per cent over the previous close on the BSE.