HDFC meets street estimates for Q2 as profit climbs 32%

Housing Development Finance Corporation Ltd (HDFC) reported strong earnings for the second quarter ended September 2021 with net profit just marginally ahead of what analysts expected.

India’s top mortgage lender said Monday standalone net profit shot up 32% to Rs 3,780 crore from Rs 2,870 crore in the same quarter last year and compared with Rs 3,000 crore for the three months ended June 30, 2021.

Profit was powered by dividend income from its subsidiaries including HDFC Bank, HDFC Life Insurance and HDFC Asset Management that more than tripled over the year-ago period to Rs 1,171 crore.

Net interest income grew 12.7% to Rs 4,108 crore, but fell a tad short of market forecasts.

Brokerages were expecting profit to grow 29-30% while they estimated that the firm will see net interest income of around Rs 4,200 crore last quarter.

HDFC’s share price rose 1.74% to close at Rs 2,893.25 apiece on the BSE in a strong Mumbai market on Monday.

HDFC Q2: Other highlights

1) HDFC’s assets under management (AUM) grew to Rs 5,97,339 crore from Rs 5,40,270 crore a year earlier.

2) As of September 30, 2021, individual loans comprise 78% of the AUM.

3) Growth in the individual loan book was 16% while growth in the total loan book on an AUM basis was 11%.

4) The collection efficiency for individual loans on a cumulative basis improved to over 98% in Q2.

5) Gross non-performing loans stood at Rs 10,341 crore, or equivalent to 2% of the loan portfolio.

6) Loans restructured under the RBI’s Resolution Framework for Covid-19 related stress was equivalent to 1.4% of the loan book, up from 0.9% three months before.

7) Of the loans restructured, 63% are individual loans and 37% are non-individual loans. Of the total restructured loans, 35% is in respect of just one account.

8) During the half-year ended September 30, 2021, 30% of home loans approved in volume terms and 14% in value terms have been to customers from the economically weaker section and low income group.

Loan demand

HDFC said demand for home loans remains strong and that it recorded growth both in the affordable housing segment as well as in high-end properties.

The increasing sales momentum and new project launches augurs well for the housing sector, the mortgage lender said. Individual disbursements in October were the highest ever in a non-quarter-end month. Moreover, 89% of new loan applications were received through digital channels, HDFC said.