Housing Development Finance Corporation Ltd missed street estimates by a whisker, reporting a net profit of Rs 3,668.82 crore for the June quarter, an increase of 22 percent from the year-ago period, on July 29.
The average of the estimates of seven brokerages polled by Moneycontrol had expected the net profit to be at Rs 3,902 crore.
India's largest housing finance company’s 22 percent on-year increase in net profit came on the back of a healthy 16.9 percent growth in assets under management that helped net interest income to rise by 7.8 percent.
Net interest income that came in at Rs 4,447 crore, too, fell short of the expectations of analysts who had anticipated it at Rs 4701 crore for the June quarter.
HDFC vice chairman Keki Mistry said that the full impact of the lending rate hikes undertaken by HDFC is yet to show on the loan book, which kept net interest income low for the quarter.
“This has been due to the transmission lag between the interest rate increase in borrowing costs and the increase in lending rates,” he said.
The lender’s margins improved from the year-ago period to 3.4 percent for the June quarter.
The home loan lender reported a loan growth of 16 percent, closer to its historic trend. The growth was driven by its individual loans which grew by 19 percent year-on-year on an AUM basis.
Disbursements surged during the quarter to Rs 42,000 crore, Mistry said. Individual loan disbursals grew by 66 percent year on year. The affordable housing loan segment, too, showed a healthy growth of 10 percent for the quarter, though lower than the 14 percent growth seen a year ago.
Another drag on net profit was an increase in provisions, which went up to Rs 510 crore for the June quarter from Rs 450 crore in the previous quarter. The lender holds Rs 13,328 crore or as total provisions against potential delinquencies.
That said, HDFC’s provision coverage ratio remains high. Gross bad loans improved to 1.78 percent of the total loan book for the reported quarter from 2.28 percent in the year-ago period. This was due to a fall in delinquencies in the non-individual loan book and also resolutions.
Delinquencies in the non-individual loan book fell to 4.44 percent for the June quarter from the peak of 5.05 percent in the December quarter of FY22. In the March quarter, delinquencies were at 4.77 percent. Those of the individual book, too, marginally improved to below 1 percent.The stock closed 2.2 percent higher on the NSE at Rs 2,389.