Net at Rs 91 cr; 21% more loans disbursed in Mum: Dewan

Kapil Wadhawan, CMD, Dewan Housing explains on CNBC-TV18, after the announcement of results, that the total income for Q3 stood at Rs  840.6 crore and disbursements grew 30.86 percent. The company has not witnessed a significant fall in overall costs and the net profit for the quarter stood at Rs 91 crore.

Wadhawan adds that the company has not witnessed a significant let-off in demand in small towns and cities and has 6 percent of total loan exposure in the realty sector. The finance company’s gross NPAs stood at 0.7 percent and net NPAs were zero.

Below is an edited transcript of the interview on CNBC-TV18

Q: What did was your income and profit?

A: On the back of strong sanctions and disbursement growth, the company recorded a 27-percent increase in total income, up from Rs 661.89 crore to Rs 840.64 crore resulting in a profit after tax (PAT) increase of Rs 21.7 crore from Rs 74.97 crore to Rs 91.24 crore. The total loans sanctioned has also moved up to 22.97 percent from Rs 3,189 crore to Rs 3,922 crore and disbursement from Rs 2,279 crore to Rs 2,983 crore.

Q: What is the disbursement growth in percentage terms?

A: In percentage terms, the disbursement growth is 30.86 percent.

Q: What about net interest margins (NIMs)? Are they stable, the last time they were 2.84 percent?

A: Yes. The NIMs have been stable. We aim to maintain consistent growth in NIMs at 2.8 - 3 percent.

Q: What have been your borrowing costs this quarter?

A: Obviously, there has not seen too much fall in overall cost in terms of borrowing. Hopefully, with Tuesday’s monetary policy, there should some decreases in interest rates. The cost of funding remains the same as well as the margins.

Q: What is the expect growth in loans? Has there been a substantial improvement in the demand for loans in the last quarter compared to the first half of 2012? What is the forecast for the first half of 2013?

A: Demand has been stable. Our focus is on the lower- and the middle-income segments and since most of our business comes from tier-II and tier-III markets, there has not been much of let-off in demand in the smaller towns and cities. Big cities obviously have their own challenges when it comes to overall demand.

And Mumbai is a classic example. If you compare with the September quarter, there has been seen a 21-percent increase in this quarter in total loan-disbursement.

Q: Do you lend to real estate at all?

A: Yes, we do have a small project-loan exposure of not more than 6 percent of total loan exposure.

Q: Will you apply for a banking licence?

A: I think the draft guidelines are awaited. It would be too premature to say whether we would want to apply for a licence at this stage or not.

Q: What is the level of NPA?

A: The gross NPA is again at 0.7 percent and the net NPA remains zero and has been fairly stable. We have not seen too many slippages this time in this quarter as well.

Q: Like most NBFCs, do you recognise non-performing loans (NPLs) when they default for close to 180 days. Have you progressively brought it down to 90 days?

A: It is at 90 days. We are a housing finance company regulated by the National Housing Bank (NHB).