HDFC Q1 net profit at Rs 1,556 cr; gross NPAs rise to 1.12%

The country’s largest mortgage player Housing Development Finance Corporation (HDFC) on Wednesday posted a net profit of Rs 1,556 crore in the June quarter, compared to one of Rs 1,871 crore in April-June 2016.

The two figures, it said, were not comparable. It had a gain of Rs 922 crore in this year’s quarter from a one-time stake sale in HDFC ERGO General to ERGO International AG, a subsidiary of Munich Re. It had also created a one-time special provision of Rs 275 crore as a charge to the statement of profit and loss.

The HDFC stock closed flat at Rs 1,633 per share on the BSE.

Lalitabh Shrivastawa, AVP Research, Sharekhan, said HDFC’s results were a mixed bag, with strong loan momentum. It was impacted by exposure to one account identified under the Insolvency and Bankruptcy Code (IBC), which resulted in gross non-performing assets rising. On an overall basis, the operating metrics were fairly well in order.

Emkay Financial Services said individual loan growth will pick up with a lag, given the government’s thrust on the affordable housing segment. However, margin pressures are likely to persist, given the heightened competition in this space.

Profit before tax, after adjusting for the one-time transaction, rose from Rs 2,053 crore to Rs 2,359 crore a year before. Net interest income rose 16 per cent to Rs 2,793 crore. The net interest margin was 4 per cent, as in the June quarter last year.

Individual loan disbursements grew 21 per cent, the average size being Rs 26.3 lakh. Growth in the total loan book was 18 per cent, to Rs 3,12,978 crore as of end-June.

Keki Mistry, vice-chairman and chief executive officer, HDFC, said individual loans have seen robust growth. The roll-out of the goods and services tax and Real Estate Regulation Act may have a temporary impact on growth. 

Gross non-performing loans amounted to Rs 3,513 crore, about 1.12 per cent of the loan portfolio. The capital adequacy ratio was 14.7 per cent, of which tier-I capital was 12.1 per cent and tier-II capital 2.6 per cent.

In June 2017, the Reserve Bank of India’s Internal Advisory Committee (IAC) identified various accounts for reference under the IBC, 2016. HDFC has an exposure of Rs 909 crore as on June 30 in one of these accounts, the IAC said.