HDFC, India’s largest mortgage financier, posted an 18 per cent increase in net profit in the September quarter driven by healthy growth in the individual home loan segment.
Net profit rose to ₹1,605 crore in the reporting quarter from ₹1,358 crore in the year-ago period.
The company’s board approved fund raising through American Depository Receipts of up to 10 per cent of the issued and paid-up share capital of the company.
It also plans to raise up to $750 million (₹4,800 crore) by issuing rupee denominated (also known as ‘masala’) bonds overseas.
“It (‘masala’ bonds) is a new debt instrument where foreign exchange risk is taken by investors. So we are looking at it as an opportunity as a part of our ongoing funding requirement.
Awaiting clarification “Our debt equity ratio stands at 6.5 times and capital adequacy ratio is 16.1 per cent of which tier 1 is 12.8 per cent… We are waiting for some clarification on withholding tax on the rupee denominated bonds overseas which will be cleared in next some days,” said Keki Mistry, Vice-Chairman and CEO, HDFC.
Net interest income (difference between interest earned and paid out) rose slower (by 6 per cent year-on-year) to ₹2,076 crore due to fall in interest rates leading to reduction in earnings on shareholders’ funds. But from an operating perspective, it is business as usual, Mistry reasoned.
Net interest margins declined marginally to 3.95 per cent compared with 4.01 per cent in the year-ago period.
On a sequential basis, it improved a tad from 3.8 per cent. It reduced because there is a larger proportion of funding from borrowing and lower interest rate regime, Mistry said.
Average loan size for new loans increased marginally to ₹23.6 lakh (from ₹23.4 lakh last year).
Loan book of the housing finance company increased 12 per cent to ₹2.38 lakh crore during the quarter, against ₹2.12 lakh crore in the year-ago period.
Individual loans rose 23 per cent while non-individual loans were up 8 per cent as on September-end 2015.
Gross non-performing assets (GNPA) inched up marginally to 0.71 per cent from 0.69 per cent on a sequential basis.
State sale in venture On stake sale by HDFC in the life insurance joint venture, Mistry said Standard Life will buy 9 per cent stake in the next few months after some changes in the shareholders’ agreement. “I hope it happens in this fiscal. The IPO may only happen next fiscal,” Mistry said.
On growth outlook, the HDFC chief added that from a macro perspective, growth looks good and investment cycle is likely to pick up and we will see non-individual book grow.
On individual loan business, it is business as usual.