HDFC Q1 profit falls 2% YoY to Rs 3,001 cr, misses estimates; NII up 22%

India’s biggest mortgage lender HDFC on Monday reported a 1.6 per cent year-on-year (YoY) decrease in standalone net profit at Rs 3,000.67 crore for April-June quarter of FY22 (Q1FY22) on the back of lower other income and higher tax and employee expenses. In the year-ago period, the profit stood at Rs 3,051.5 crore.
 

The number missed Street expectation, which had estimated up to 9 per cent YoY rise in PAT. Analysts at Nomura, for instance, had pegged HDFC’s net profit at Rs 3,318.5 crore while those at HSBC projected the same at Rs 3,253.6 crore, suggesting a rise between 7-9 per cent YoY.
 

Sequentially, the profit declined 5.6 per cent from Rs 3,179.83 crore.

On a consolidated basis, profit after tax stood at Rs 5,311 crore as compared to Rs 4,059 crore in the previous year, representing a growth of 31 per cent.
 

The profit before tax for the quarter ended June 30, 2021 stood at Rs 3,905 crore compared to Rs 3,607 crore in the previous year.
 

On the revenue front, the lender’s net interest income (NII) came in at Rs 4,147 crore for the quarter under review, up 22.2 per cent compared with previous year’s NII of Rs 3,392 crore. On a quarterly basis, the income increased marginally by 2 per cent from Rs 4,064.8 crore reported in Q4FY21.
 

“Inclusive of income from assigned loans, the NII for the quarter ended June 30, 2021 stood at Rs 4,414 crore compared to Rs 3,576 crore in the previous year, representing a growth of 23 per cent,” the NBFC said in a statement.
 

Net interest margin, meanwhile, was at 3.7 per cent.
 

At the end of the June quarter, HDFC’s assets under management (AUM) stood at Rs 5.74 trillion, relative to Rs 5.31 trillion at the end of June, 2020 quarter.
 

“As at June 30, 2021, individual loans comprise 78 per cent of the total AUM. On an AUM basis, the growth in the individual loan book was 14 per cent and growth in the total loan book was 8 per cent,” it said.

It added: The demand for home loans continues to remain strong and disbursements have picked up with the unlocking of respective locations. While disbursements during April and May of the current financial year were somewhat impacted, business has reverted to normalised trends in the months of June and July. July 2021 disbursements were the highest ever in a non-quarter end month.
 

NPA and provisioning

HDFC said its gross non-performing loans as at June 30, 2021 stood at Rs 11,120 crore, equivalent to 2.24 per cent of the loan portfolio. The GNPA ratio in Q4FY21 stood at 1.98 per cent.

Besides, it carries provisions worth Rs 5,778 crore. Of this, Rs 2,443 crore is towards provisioning for standard assets and Rs 3,335 crore is towards non-performing assets. The provisions as at June 30, 2021 stood at Rs 13,189 crore.

Meanwhile, the collection efficiency for individual loans on a cumulative basis in June 2021 stood at 98.3 per cent compared to 98 per cent in March 2021.
 

“Individual NPAs increased due to slippages on account of the impact of the second wave of the pandemic. Collection efforts were hindered due to the recovery teams being unable to do field visits during the lockdown period. Further, various court orders temporarily curbing recovery efforts of financial institutions, including refraining possession activities under SARFAESI hampered the collection efforts,” HDFC said in a statement.

The scrip of HDFC rose over 1 per cent at Rs 2,472 apiece on the BSE post result announcement as compared to a 0.68 per cent rally in the benchmark S&P BSE Sensex.