Top mortgage lender HDFC Ltd today reported an 11 per cent rise in consolidated net profit at Rs 2,419 crore for the December quarter, driven by an uptick in commercial lending and better performance by subsidiaries.
HDFC Vice-Chairman and Chief Executive Keki M Mistry attributed the lower rise in net to "lower profit on sale of investments at Rs 57 crore against Rs 113 crore, lower income from leased properties, other income and higher depreciation compared to the previous year."
"Lower net growth is due to lower non-core income -- profit on sale of investments was Rs 57 crore, down from Rs 113 crore a year ago -- and income from leased properties was Rs 1 crore, down from Rs 17 crore."
Had it not been for the traction in commercial loan book, which after de-growing in the first two quarters rose by net addition of Rs 1,987 crore, the numbers would have been even lower, he said.
During the quarter, retail loan book, which has been growing at a steady pace all through, gained further traction in the October-December period clipping at 23 per cent.
Mistry said had it not been for the sale of loans, primarily to its banking arm HDFC Bank and near halving of income from sale of investments, which came down to just Rs 57 crore as against Rs 113 crore a year ago, the net income would have been higher at 15 per cent.
The largest mortgage lender sold Rs 12,975 crore loans in 12 months to December, while the unrealised gains on HDFC's listed investments amounted to Rs 59,091 crore, as against Rs 51,996 crore.
Growth in the non-individual loan portfolio has picked up, recording a net rise of Rs 1,987 crore for the quarter under review. Accordingly, the lender made higher provisioning, mainly on account of standard assets at Rs 68 crore, up from Rs 45 crore, Mistry said.
Also, he said owing to lower interest rate, it earned lower interest on shareholders funds worth Rs 27,000 crore, impacting profitability. If adjusted for these factors, profit growth for the quarter would have been around 15 per cent.
On a standalone basis, HDFC net rose 6.7 per cent to Rs 1,520.51 crore during the December quarter from Rs 1,425.49 crore a year ago.
Including deferred tax provisions and excess overall provisions, the net income on a standalone basis would have been 13 per cent, Mistry said, adding the standalone income rose to Rs 7,327.69 crore for the quarter from Rs 6,882.52 crore.
In Q3, HDFC's total income increased to Rs 12,306.52 crore
from Rs 11,952.48 crore a year ago, Mistry said.
As of end-December, the loan book stood at Rs 2,48,097 crore as against Rs 2,19,939 crore in the previous year.
The lender mainly finances loans for purchase or construction of residential houses, commercial real estate and certain other purposes.
Shares of HDFC closed 0.55 per cent down at Rs 1,167.70 on BSE, while the Sensex closed flat after a see-saw trade.
Mistry said NIM inched up to 3.83 per cent from 3.85 per cent on a sequential basis.
The company maintained its asset quality at a healthy 0.72 per cent. Under the NHB guidelines, HDFC has to set aside 1.12 per cent for each rupee it lends to commercial properties which are standard assets, while the same for retail loans is much lower at 0.40 per cent of each rupee it lends.
Accordingly, gross non-performing loans amounted to Rs 1,794 crore, or 0.72 per cent of the loan portfolio. The non- performing loans of the individual portfolio stood at 0.54 per cent while that of the non-individual portfolio stood at 1.12 per cent.
The company paid Rs 670 crore for tax, including Rs 94 crore as deferred tax liability on the special reserves.
As of end December, total assets of HDFC stood at Rs 2,76,163 crore, up 12 per cent from Rs 2,45,881 crore a year ago. Total loan book was Rs 2,48,097 crore as against Rs 2,19,939 crore.
Growth in non-individual loan portfolio stood at 10 per cent. The growth in total loan book, after adding back the loans sold in the preceding 12 months, is 19 per cent.
Of total loan book on an AUM basis, individual loans comprised 73 per cent. The average size of the individual loans stood at Rs 25 lakh and on an AUM basis, in the nine months to December, 93 per cent of the incremental growth in the loan book came from individual loans.
As of end-December, total loans outstanding in respect of loans sold/assigned were at Rs 28,987 crore.
Mistry said the share of profit from subsidiaries and associates stood at 33 per cent for the nine months to December, with life insurance arm contributing Rs 188.20 crore and non-life arm Rs 153.17 crore.
