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Dewan Housing Finance Corporation Ltd (DHFL) shares closed up 4.38 per cent on Wednesday on the back of the company reporting a 52 per cent jump in year-on-year second quarter standalone net profit at ₹439 crore against ₹288 crore in the year ago quarter.
Interest income was up 42 per cent year-on-year in the reporting quarter to ₹3,245 crore. Fees and commission income almost doubled to ₹165 crore.
On the expenses side, finance costs rose 25 per cent y-o-y to ₹2,440 crore. Employee benefit expenses increased 29 per cent y-o-y to ₹107 crore. Provision for expected credit loss was up 20 per cent y-o-y to ₹133 crore.
Further, net loss on de-recognition of financial instruments under amortised cost category at ₹51.33 crore (nil a year ago). Other expenses soared 56 per cent y-o-y to ₹122 crore.
Loan disbursements rose 39 per cent y-o-y to ₹13,870 crore during the quarter. Loan book outstanding grew 35 per cent y-o-y to ₹1,10,093 crore as at September-end 2018.
Kapil Wadhawan, Chairman and MD, DHFL, said: “During the quarter under review, DHFL maintained robust performance led by loan growth disbursements in the affordable housing segment. Considering that two-thirds of our home loan portfolio is retail home loans wherein our average home loan ticket size is below ₹11 lakh, we have endeavoured to protect margins at 300 to 305 basis points.”
The company’s shares crashed 60 per cent intraday on September 21, striking panic across stock markets, and dragging down the shares of other housing finance companies as well. By close of trading that day, DHFL had lost ₹259.05 or nearly 43 per cent, wiping out over ₹10,000 crore of market capitalisation.
The Prime Minister’s Office has reportedly sought a probe by markets regulator SEBI into the stock crash.
Temporary lull
Referring to the financial services sector, specifically NBFCs that witnessed an unexpected, slump and liquidity tightness over the past few weeks, Wadhawan said DHFL has taken steps to mitigate these issues.
“The company has been diligent towards all its repayments and fulfilled every financial obligation…. Since September 24, 2018, DHFL has repaid liabilities of nearly ₹14,000 crore which includes more than ₹9,000 crore of CP (commercial paper) repayments.“This target was met by the company through internal liquidity generation and minimal external borrowings,” said Wadhawan.
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