Housing Development Finance Corp (HDFC) on Friday reported a net profit of Rs 3,669 crore for the April-June period, up 22.3 percent compared with the corresponding period a year ago as robust loan disbursements aided income growth. The net profit, however, fell short of Street expectations.
HDFC shares gave up some of its intraday gains after the earnings announcement, having risen as much as two percent to Rs 2,386 apiece on BSE earlier in the day.
The mortgage lender's net interest income — or the difference between interest earned and interest paid — increased 7.7 percent to Rs 4,465 crore compared with the year-ago period, according to a regulatory filing.
Analysts in a CNBC-TV18 poll had estimated HDFC's quarterly net profit at Rs 3,908.4 crore and net interest income at Rs 4,593.5 crore.
HDFC said its individual loan disbursements rose 66 percent on year in the three-month period, as loans in the segment saw the highest growth on an asset under management (AUM) basis in eight years.
HDFC's asset quality — determined by the proportion of bad loans in total loans — improved in the three month period. Its gross non-performing assets — or bad loans — came down to 1.78 percent in the quarter ended June, from 1.91 percent in the previous three months.
Its net interest margin — a key metric of profitability for lender — came in at 3.4 percent, as against 3.5 percent in the previous three months.
The lender said some of the numbers are not directly comparable with the year-ago period on account of a volatile environment. Interest rate changes imposed a short-term impact on its net interest income and "to a slightly lesser extent on the net interest margin", it said.
"This has been due to the transmission lag between the interest rate increase in borrowing costs and the increase in lending rates," HDFC added.
HDFC proposed to raise an international social loan of $1.1 billion.
It also announced investment of up to Rs 2,000 crore in HDFC Life through preferential issuance of shares.
HDFC Bank — India's largest bank by market value — is buying its biggest shareholder, HDFC, in a mega $40-billion deal that will create one of the largest financial services companies in the world.
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