DHFL back in the black, posts Rs 97-crore net profit in March quarter

While its committee of creditors as well as the RBI and the CCI, have given their approval to the resolution plan put forward by the Piramal Group, the plan is awaiting the NCLT

Mortgage lender Dewan Housing Finance Limited (DHFL) has reported a net profit of Rs 97 crore on a standalone basis in the quarter ending March of FY21 compared to a loss of Rs 7,634.89 crore in the year-ago period.

However, revenue from operations of the housing finance declined 14 percent to Rs 2,034.53 crore in Q4FY21 compared to Rs 2,387.58 crore in Q4FY20. 

For the full year, DHFL, which is reeling from insolvency, has reported a loss of Rs 15,051 crore, while total income for the year stood at Rs 8,802.79 crore. The company reported a negative net worth of Rs 20,637.05 crore. 

DHFL became the first financial services company to be referred to insolvency back in 2019. While the committee of creditors (CoC) to DHFL, as well as the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), have given their approval to the resolution plan put forward by the Piramal Group, the plan is awaiting the National Company Law Tribunal's (NCLT’s) approval. 

“The net worth of the company is fully eroded, rendering the company unable to comply with the regulatory requirements of the RBI in respect of the Net Owned Fund (NOF)”, the auditor’s report said. 

The company has incurred losses aggregating to Rs 15,051 crore (including other comprehensive income) during in FY21, and has accumulated losses due to which its net worth has been fully eroded, it added.  

However, these standalone financial results are drawn on going concern basis under the ongoing Corporate Insolvency Resolution Process (CIRP), the outcome of which cannot be ascertained immediately. 

Therefore, the company's ability to remain as a “going concern” depends upon the outcome of the ongoing CIRP, the auditor’s report noted.