HDFC Q1 results: Profit slips 5% to Rs 3,051 crore; board approves Rs 45,000 crore fundraise

Housing Development Finance Corporation (HDFC) on Thursday reported a 4.7 percent year-on-year (YoY) decline in standalone net profit at Rs 3,051.5 crore for the first quarter ended June 30. The mortgage lender had posted a net profit of Rs 3,203.10 crore in June quarter of 2019 and Rs 2,232.5 crore in March quarter of 2020.

"On a consolidated basis, profit after tax stood at Rs 4,059 crore as compared to Rs 3,540 crore in Q1 FY20, registering a growth of 15 per cent," HDFC said in a filing to the Bombay Stock Exchange.

HDFC said that the current and previous year's numbers are not directly comparable as most parts of the June quarter entailed a strict national lockdown in order to prevent the spread of COVID-19. Operations commenced on June 8, 2020 with the first phase of unlock that began on June 8, 2020.

The company received a dividend income of Rs 298 crore in June quarter, while profit on sale of investments stood at Rs 241 crore.

"After adjusting dividend, profit on the sale of investments, net gains on de-recognition of assigned loans, provisioning and the impact of negative carry on account of higher liquidity, the adjusted profit before tax for the quarter stood at Rs 3,265 crore compared to 2,684 crore in the previous year, reflecting a growth of 22 per cent," HDFC said.

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HDFC's revenue increased marginally to Rs 13,017.7 crore in Q1 FY21, as against Rs 12,990.3 crore in the corresponding quarter last year.  

During the April-June quarter, net interest income (NII) of the non-bank finance company (NBFC) rose 10 per cent to Rs 3,392 crore compared to Rs 3,079 crore in the previous year. The company said that the NII numbers are not comparable with each other due to the higher liquidity levels and equity investments made in the recent period.

After considering the impact of liquidity and equity investments, the adjusted NII for the quarter stood at Rs 3,609 crore, reflecting a growth of 17 per cent.

Net interest margin stood at 3.1 per cent compared to 3.3 per cent in the corresponding quarter last year.

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During the quarter under review, HDFC's assets under management (AUM) stood at Rs 5,31,555 crore as against 4,75,933 crore in the previous year. Individual loans comprise 74 percent of the total AUM.  

On the asset quality front, HDFC's gross non-performing loans stood at Rs 8,631 crore as on June 30, 2020, compared to Rs 8,908 crore as at March 31, 2020. This is equivalent to 1.87 per cent of the loan portfolio versus 1.99 per cent as at March 31, 2020. The non-performing loans of the individual portfolio stood at 0.92 per cent while that of the non-individual portfolio stood at 4.10 per cent.

The provisions stood at Rs 12,285 crore as of June 30, 2020. The company made a COVID-19 provision at Rs 1,199 crore.

The company's outstanding deposits increased from Rs 1,32,324 crore as on March 31, 2020 to Rs 1,43,335 crore as on June 30, 2020.

For the quarter ended June 30, 2020, cost to income ratio stood at 9 per cent as against 9.5 per cent in the same period previous year.

The corporation's capital adequacy ratio stood at 17.3 per cent, of which Tier I capital was 16.2 per cent and Tier II capital was 1.1 per cent. As per the RBI norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 14 per cent and 10 per cent, respectively.

In a separate development, HDFC's board has approved a proposal to raise funds up to Rs 45,000 crore through issuance of secured redeemable, non-convertible debentures on private placement basis.

Following Q1 results, shares of HDFC were trading at Rs 1,828.05 apiece, down 2.74 per cent, on the Bombay Stock Exchange.