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HDFC Q1 Results: Net profit increases by 22% to Rs 3,668.82 crore; AUM increases by 17%

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HDFC Q1 Outcome: The home loan lender recorded loan growth of 16%, powered by individual loans that climbed 19% on an AUM basis year-over-year.

On July 29, Housing Development Finance Corporation Ltd reported a net profit of Rs 3,668.82 crore for the June quarter, an increase of 22 percent compared to the same period last year.

Moneycontrol polled seven brokerages and found that the average forecast for net profit was Rs 3,902 crore.

The net profit of India’s largest housing finance company increased by 22 percent year-over-year due to a solid 16.9 percent increase in assets under management, which contributed to a 7.8 percent increase in net interest income.

HDFC Bank
HDFC Bank

The June quarter’s net interest income of Rs 4,447 crore also fell short of the estimates of analysts, who had predicted Rs 4,701 crore.

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The vice chairman of HDFC, Keki Mistry, stated that the full impact of HDFC’s rate hikes on the loan book has yet to materialize, which kept net interest revenue low for the quarter.

“This is a result of the transmission lag between the increase in borrowing costs and the increase in lending rates,” he explained.

For the June quarter, the lender’s margins increased from the same period the previous year to 3.4%.

The mortgage lender recorded a 16 percent increase in loans, which is closer to its historical tendency. The growth was driven by its individual loans, which increased 19 percent on an AUM basis year-over-year.

Mistry stated that disbursements increased to Rs 42,000 crore during the quarter. Individual loan disbursements increased by 66 percent annually. The affordable housing loan category also grew by 10% during the quarter, albeit at a slower rate than the previous year’s 14 percent.

HDFC Bank
HDFC Bank

Provisions increased to Rs 510 crore for the June quarter, up from Rs 450 crore for the preceding quarter. This had a negative effect on net income. The lender has total provisions of Rs 13,328 crore against probable defaults.

However, HDFC’s provision coverage ratio continues to be high. Gross nonperforming loans as a percentage of total loans decreased from 2.28 percent to 1.78 percent in the reported quarter. This was attributable to a decline in non-individual loan defaults as well as resolutions.

Non-individual loan delinquencies decreased to 4.44 percent in the June quarter, from a peak of 5.05 percent in the December quarter of FY22. In the March quarter, 4.77 percent of loans were delinquent. Similarly, those of the individual book improved little to below 1 percent.

The stock rose 2.2% to settle at Rs 2,389 on the NSE.

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