HDFC Second Quarter In-Line With Analyst Estimates

Housing Development Finance Corporation Ltd.’s net profit grew 13.9 percent in the July to September quarter, even as provisions for bad loans increased.

Net profit rose to Rs 1,827 crore compared to Rs 1,605 crore in the corresponding quarter last year, the non-banking finance company said in its filing to the exchanges. The net profit number was in-line with the Rs 1,811 crore consensus estimate of analysts tracked by Bloomberg.

Total income rose 9.2 percent to Rs 8,091 crore compared to Rs 7,407 crore earlier.

Provision Picture

Provisions increased 82.7 percent to 95 crore from Rs 52 crore in the year-ago period. Provisions were however lower than the Rs 340 crore set aside in the quarter ended June 2016.

Gross non-performing assets stood at 0.76 percent or Rs 2,108 crore for quarter.

Fundraising Plans

HDFC, which has already raised Rs 5,000 crore this year through masala bonds, or rupee-denominated overseas bonds, in four tranches.

Three of the four tranches were raised at a lower rate than the previous one, said Keki Mistry, vice chairman and chief executive officer of HDFC in an interview with BloombergQuint, pointing out that the cost of funds has come down incrementally for the company.

HDFC has now raised the total amount that it was allowed to through masala bonds, and will now make an application to the Reserve Bank of India to raise additional funds through this instrument.

Other Highlights

• Total loan book grew 15.72 percent to Rs 2.75 lakh crore.
• Net interest margins improved 7 basis points to 3.85 percent from to 3.78 percent earlier.
• The spread on loans over the cost of borrowings stood at 2.28 percent compared to 2.26 percent in the quarter ended June 30.
• The spread on individual loan book was 1.95 percent and non-individual loan book was 3.04 percent.
• Total assets under management stood at Rs 3,11,264 crore.