HDFC Q4 net profit rises 16%, beats estimates

HDFC Ltd today reported a 16% growth in January-March net profit to Rs 3,700 crore, beating market estimates of around Rs 3,250 crore. 

The home loan major had reported a net profit of Rs 3,180 crore in the corresponding quarter of the previous quarter.

India’s largest mortgage lender said its net interest income for the fourth quarter grew 14% to Rs 4,601 crore from Rs 4,027 crore a year ago.

The net interest income for the year ended March 31, 2022 also grew 14%, to Rs 17,119 crore.

For the fiscal year 2021-22, the net profit grew 16% to Rs 17,246 crore from Rs 14,815 crore in the previous year.

The gross individual non-performing loans ratio was at 0.99% of the individual portfolio as of March 31, down from 1.44% a quarter ago. The gross non-performing non-individual loans ratio improved to 4.76% from 5.04% a quarter ago.

Overall, the gross non-performing loan ratio improved to 1.91% of the portfolio as of March 31, from 2.32% as of December 31.

Assets under management grew to Rs 6,53,902 crore as on March 31, from Rs 5,69,894 crore a year ago. Of this, individual loans comprised 79%.

Other key highlights

1) The board recommended a dividend of Rs 30 per equity share for 2021-22.

2) In March, the company recorded its highest monthly individual disbursements ever.

3) During the year ended March 31, 2022, the average size of individual loans stood at Rs 33 lakh. For the quarter ended March 31, 2022, the average loan size was Rs 34.7 lakh.

4) The spread on loans over the cost of borrowings for the year ended March 31, 2022 was 2.29%. The spread on the individual loan book was 1.93% and on the non-individual book was 3.40%.

5) The reported Net Interest Margin was 3.5%.

6) As at March 31, 2022, the capital adequacy ratio stood at 22.8%, of which Tier I capital was 22.2% and Tier II capital was 0.6%.  All of these were much higher than regulatory requirements.

7) As at March 31, 2022, loans restructured under the RBI’s Resolution Framework for COVID-19 Related Stress was equivalent to 0.80% of the loan book.

8) As at March 31, 2022, loans approved under the Emergency Credit Line Guarantee Scheme stood at Rs 2,216 crore of which, 79% has been disbursed.

Management commentary

“The demand for home loans and pipeline of loan applications continues to remain strong. Growth in home loans was seen in both, 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,” HDFC said.

In the fourth quarter of the financial year under review, the non-individual loan book recorded a growth, with a good pipeline of loans from lease rental discounting and construction finance, it said.

The highest ever monthly disbursement in March came despite the fact that the previous year entailed concessional stamp duty benefits in certain states which were not there in the current year, HDFC said.