IDFC net up only 2%, reflecting infra sector sluggishness

Consolidated operating income rose 5% to Rs 889 crore versus Rs 849 crore in the year-ago period

Reflecting the state of the infrastructure sector, IDFC Ltd, among the  largest companies financing the segment, on Thursday posted only a two-per cent yearly rise in consolidated net profit, at Rs 487 crore, for the financial year’s second quarter (Q2) ended September.

Consolidated operating income rose five per cent to Rs 889 crore versus Rs 849 crore in the year-ago period. This was ahead of analyst expectations of Rs 790 crore; they’d also expected a slightly lower net profit, of Rs 482 crore.

Net interest income (NII) grew seven per cent to Rs 685 crore, up from Rs 642 crore in June-September 2012. The interest income from loans rose eight per cent to Rs 642 crore.

IDFC, one of the aspirants for a new banking licence, saw its stock closing three per cent higher at Rs 105.8 on the BSE exchange.

Treasury income declined five per cent to Rs 44 crore, indicating impact of tight liquidity and a volatile market environment.

Non-interest income, capturing earning from streams such as investment banking, broking services and asset management, declined one per cent to Rs 200 crore in Q2 from Rs 203 crore a year before. Income from the asset management business was up 51 per cent to Rs 104 crore but loan book-related fees declined 77 per cent, from Rs 44 crore to Rs 10 crore.

The balance sheet was at Rs 69,961 crore as on September 30. The gross loan book increased by three per cent from Rs 54,137 crore as on September 30, 2012, to Rs 55,957 crore as on September 30.

Rising interest costs and subdued growth in NII put pressure on the net interest margin (NIM), 4.1 per cent for the 12 months ended September versus 4.4 per cent in the year-ago period. For FY13, the NIM stood at 4.1 per cent.

Gross non-performing loans were Rs 180.5 crore (0.32 per cent of the total) as against Rs 150 crore (0.28 per cent) earlier. Net NPLs were 0.2 per cent of loan dues.

Capital adequacy was 23.9 per cent as on September 30, of which tier-I capital was at 21.6 per cent.