Housing finance major HDFC Ltd reported a 20 per cent increase in net profit at Rs 971 crore in the July-September 2011 quarter against Rs 808 crore in the corresponding quarter last year, aided by strong growth in loans as well as income from sale of investments.
“The demand for home loans has been steady and has not been affected by rising interest rates or high property prices. Property prices are holding high only in Mumbai,” Mr Conrad D'Souza, Member of Executive Management, HDFC Ltd, said.
The company sold loans worth Rs 1,867 crore in the second quarter.
Total loans, net of loans sold, grew by 19 per cent to Rs 1,26,992 crore (Rs 1,06,287 crore).
Loans to individuals increased to Rs 80,268 crore (Rs 68,263 crore), while loans to corporate bodies increased to Rs 45,144 crore (Rs 36,523 crore).
For the six-month period ending September 30, 2011, net profit increased to Rs 1,815 crore (Rs 1,502 crore).
Sale of investment
Profit on sale of investment in the April-September 2011 period grew by 75 per cent to Rs 103 crore (Rs 59 crore). This was partly on account of HDFC receiving about Rs 50 crore from the sale of its 5 per cent stake in the BPO Intelenet, which was sold to Serco, a UK-based outsourcing company, Mr D'Souza said.
Loan approvals grew by 18 per cent and loan disbursements grew by 19 per cent compared to the six-month period in the previous year.
“We expect 18 per cent growth in loans this year,” Mr D' Souza said.
Although there was marginal decline in spreads, it was higher than 2.25 per cent, which is the target for this year, he added.
HDFC made a provision of Rs 1,196 crore, which includes Rs 445 crore on standard assets in respect of dual rate housing loans, said a press release issued by the company.
A report by Standard Chartered Bank said, “Operating performance remains strong with healthy loan growth, stable spreads and sound asset quality. While core income was in line, higher-than-expected trading gains explained why actual net profit was above our estimate.”
Shares of HDFC closed at Rs 672.65, up 0.95 per cent, from Rs 666.35, on the BSE, on Monday.