HDFC Q1 profit jumps 22% YoY to Rs 3,669 crore, misses estimates

HDFC clocked the highest percentage growth in individual loan AUM in 8 years

Mortgage lender Housing Finance Development Corporation (HDFC) reported standalone net profit of Rs 3,668.82 crore on Friday, for the April-June quarter of fiscal 2022-23 (Q1FY23), driven by higher interest and dividend income. This was 22.2 per cent higher than last year’s (Q1FY22’s) profit of Rs 3,001 crore. 
 

Sequentially, the profit slipped marginally by 0.8 per cent from profit of Rs 3,700 crore reported in Q4FY22. The consolidated Profit After Tax for the quarter ended June 30, 2022 stood at Rs 5,574 crore.
 

The management said assets under management (AUM) at the end of the June quarter stood at Rs 6.71 trillion, as against Rs 5.74 trillion at the end of Q1FY22. At the end of March 2022 quarter, HDFC’s AUM stood at Rs 6.54 trillion. 

“As at June 30, 2022, individual loans comprise 79 per cent of the Assets Under Management (AUM). On an AUM basis, the growth in the individual loan book was 19 per cent. This marks the highest percentage growth in the individual loan AUM in 8 years,” HDFC said in a statement.

The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 28 per cent. The growth in the total loan book after adding back loans sold was 23 per cent.

Given this, the home loan financier reported net interest income (NII) of Rs 4,447, relative to Rs 4,147 crore in Q1FY22, and Rs
4,601 crore in Q4FY22. Net interest margin came in at 3.4 per cent for the quarter under review.

“The monetary policy and interest rate actions have had a short-term impact on the net interest income and to a slightly lesser extent on the net interest margin. This has been due to the transmission lag between the interest rate increase in borrowing costs and the increase in lending rates,” HDFC said.

Opex growth came higher at 32.3 per cent YoY. Thus, cost-to-income (C/I) ratio stood at 10.3 per cent during the quarter. 

On account of volatile equity markets, the net gain on investments fair valued through the profit and loss account stood at Rs 8 crore, down from Rs 402 crore last year. 

On the asset quality front, the gross non-performing asset (GNPA) stood at 0.98 per cent of individual loan portfolio, while the gross non-performing non-individual loans stood at 4.44 per cent of the non-individual portfolio. Overall, asset quality further improved as GNPA ratio declined from 1.91 per cent to 1.78 per cent QoQ. 

Provisions grew 28.2 per cent QoQ and down 25 per cent YoY to Rs 514 crore. 

The collection efficiency for individual loans on a cumulative basis stood at over 99 per cent during the quarter ended June 30, 2022.