Q1 Results: Indiabulls Housing Finance’s Profit Falls, Bad Loans Rise

Indiabulls Housing Finance Ltd.’s profit fell, missing estimates, in the June quarter as asset quality worsened.

Net profit declined 24 percent year-on-year to Rs 801 crore in the April-June quarter, according to the non-bank lender’s exchange filing. That compares with the Rs 988-crore consensus estimate of analysts tracked by Bloomberg.

Its revenue fell 12 percent over the last year to Rs 1,522 crore. Net interest income, or the core income from operations, dropped 12.7 percent to Rs 1,475 crore during Q1—lower than the Rs 1,544-crore estimate.

The company’s gross non-performing asset ratio rose to 1.47 percent from 0.88 percent in the three months ended March. Its net NPA ratio increased to 1.1 percent from 0.69 percent in the preceding quarter. Indiabulls Housing Finance said its loan books were down 10 percent year-on-year to Rs 1.13 lakh crore.

During the quarter, the non-bank lender had proposed a merger with Lakshmi Vilas Bank. The company, in the filing on Tuesday, said it has received an approval from the Competition Commission of India for the proposed deal. The company, however, is awaiting approval from the Reserve Bank of India and stock exchanges.

Its board also proposed to appoint Sameer Gehlaut as non-executive chairman, and Gagan Banga as the managing director and chief executive of the merged entity to “ensure continuity”, according to the filing.

Indiabulls Housing Finance also declared an interim dividend of Rs 8 per equity share for 2019-20. The record date to determine the names of eligible members is Aug. 20. The dividend will be paid on or before Sep. 5, it said in a separate filing.

On Tuesday, Indiabulls Housing Finance’s shares rose 7.87 percent to Rs 514.10 apiece on the BSE while the benchmark Sensex rose 0.75 percent to end the day at 36,976.85 points. The company’s Q1 results were declared after market hours.