HDFC Q3 PAT improves 11% yoy to Rs3,261cr; Stock dips 1%

3 Feb 2022 , 09:15 AM

Housing Development Finance Corporation Limited (HDFC) reported profit after tax (PAT) stood at Rs3,261cr compared to Rs2,926cr in the corresponding quarter of the previous year, representing a growth of 11%. Profit before tax (PBT) for the quarter ended December 31, 2021 stood at Rs4,048cr compared to Rs3,753cr in the corresponding quarter of the previous year.

After providing for tax of Rs2,582cr (previous year: Rs2,044cr), the profit after tax for the nine months ended December 31, 2021 stood at Rs10,042cr compared to Rs8,847cr in the corresponding period of the previous year, representing a growth of 14%. The profit before tax for the nine months ended December 31, 2021 stood at Rs12,624cr compared to Rs10,891cr in the corresponding period of the previous year, representing a growth of 16%.

The net interest income (NII) for the nine months ended December 31, 2021 stood at Rs12,519cr compared to Rs10,943cr in the previous year, representing a growth of 14%. The net interest income (NII) for the quarter ended December 31, 2021 stood at Rs4,284cr compared to Rs4,005cr in the previous year.

During early trade on Thursday, Housing Development Finance Corporation Ltd was trading at Rs2,584.35 per piece down by Rs27.65 or 1.06% from its previous closing of Rs2,612 per piece on the BSE.

Spreads and net interest margin
The spread on loans over the cost of borrowings for the nine months ended December 31, 2021 was 2.26%. The spread on the individual loan book was 1.93% and on the non-individual book was 3.25%. The reported Net Interest Margin (NIM) was 3.6%.

Investments
All investments in the Corporation’s subsidiary and associate companies are carried at cost and not at fair value. Accordingly, as at December 31, 2021, the unaccounted gains on listed investments in subsidiary and associate companies amounted to Rs2,49,914cr.

Lending operations
During the nine months ended December 31, 2021, individual approvals and
disbursements grew by 45% and 48% respectively compared to the corresponding period in the previous year.

In December 2021, the Corporation recorded its second highest monthly individual disbursements ever. This is despite the fact that the previous year entailed concessional stamp duty benefits in certain states which was not there in the current year.

The demand for home loans and pipeline of loan applications continues to remain strong. Growth in home loans was seen in both, the affordable housing segment as well as in high end properties. The increasing sales momentum and new project launches augurs well for the housing sector.

89% of new loan applications were received through digital channels.

Affordable Housing
During the nine months ended December 31, 2021, 30% of home loans approved in volume terms and 13% in value terms have been to customers from the Economically Weaker Section (EWS) and Low Income Group (LIG).

The average home loan to the EWS and LIG segment stood at Rs11.1 lac and Rs19.5 lac respectively.
The Corporation continued to have the largest number of home loan customers of over 2.7 lac who have availed benefits under the Credit Linked Subsidy Scheme (CLSS). As at December 31, 2021, cumulative loans disbursed by the Corporation under CLSS stood at Rs45,914cr and the cumulative subsidy amount stood at Rs6,264cr.

Overall Lending Operations
During the nine months ended December 31, 2021, the average size of individual loans stood at Rs32.3 lac (PY: Rs28.5 lac). For the quarter ended December 31, 2021, the average loan size was Rs33.0 lac.
As at December 31, 2021, the assets under management (AUM) stood at Rs6,18,917cr as against Rs5,52,167cr in the previous year. As at December 31, 2021, individual loans comprise 79% of the AUM.
On an AUM basis, the growth in the individual loan book was 16% and growth in the total AUM was 12%.
During the quarter ended December 31, 2021, the Corporation assigned loans amounting to Rs7,468cr (PY: Rs7,076cr) to HDFC Bank. Loans sold in the preceding 12 months amounted to Rs27,591cr (PY: Rs16,956cr).

As at December 31, 2021, the outstanding amount in respect of individual loans sold was Rs79,748cr. HDFC continues to service these loans.

The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 24%. The growth in the total loan book after adding back loans sold was 17%.

Collection Efficiency, Non-Performing Assets (NPAs) & Provisioning
The collection efficiency for individual loans on a cumulative basis witnessed an improvement to stand at an average of 98.9% during the quarter ended December 31, 2021.

As at December 31, 2021, the gross individual NPLs stood at 1.44% of the individual portfolio while the gross non-performing non-individual loans stood at 5.04% of the nonindividual portfolio.

The gross NPLs as at December 31, 2021 stood at Rs12,419cr. This is equivalent to 2.32% of the portfolio.

Out of the total reported gross NPLs of Rs12,419cr, Rs2,746cr comprises loans which are less than 90 days past due as at December 31, 2021.