HDFC beats the Street, post 42% net profit surge to Rs 3,180 cr in Q4

Board okays re-appointment of Keki Mistry as vice-chairman, CEO for 3 more years

The country’s largest mortgage lender, HDFC, on Friday reported a 42 per cent YoY rise in standalone net profit at Rs 3,180 crore in the March quarter, beating Street estimates. The profit was aided by a higher net interest income (NII).
 
This compares with a profit of Rs 2,232.5 crore in the year-ago period (Q4FY20). On a quarterly basis, the profit rose 8.6 per cent, from Rs 2,925.8 crore in Q3FY21.
 
Housing Development Finance Corporation’s NII was up 14 per cent YoY to Rs 4,065 crore in Q4FY21 while net interest margin was at 3.5 per cent, up 10 basis points (bps) YoY, helped by an 8 bps sequential uptick in non-individual spreads. Inclusive of fees and income from assigned loans, the NII for Q4 was Rs 4,532 crore compared to Rs 3,846 crore in the previous year, representing 18 per cent growth.  The lender made provisions of Rs 719 crore in the reporting quarter compared to Rs 1,274 in the year-ago period.
 
In a statement, the lender said it currently holds provisions worth Rs 13,025 crore, against the regulatory requirement of Rs 5,491 crore. Of this, Rs 844 crore is provisions for Covid-19.  As far as asset quality is concerned, the non-performing asset (NPA) ratio at March-end was 1.98 per cent, deteriorating slightly on a sequential basis. While the individual loan portfolio’s NPA ratio was 0.99 per cent, the non-individual loan portfolio had a much higher NPA ratio of 4.77 per cent.
 
The lender said as of March, Rs 4,479 crore worth of loans have been recast under the Reserve Bank of India’s one-time restructuring scheme. Of this, Rs 923.43 crore are retail loans and the rest are from eight accounts of a corporate entity with loans worth Rs 2,763.65 crore. It has made provisions of Rs 3,678.78 crore against these restructured loans.
 
“In Q4, individual loan disbursements grew 60 per cent YoY. March witnessed the highest levels in terms of individual receipts, approvals, and disbursements. Growth in home loans was seen in both the affordable housing segment as well as high-end properties,” it said.
 
“Q1 was significantly impacted due to the lockdown, with our individual loan disbursements just 37 per cent of what they had been in the year-ago period. We started seeing a sharp pick-up in disbursements in Q2, with individual loan disbursements reaching 95 per cent of what they were in Q2 of last year,” said Keki Mistry, vice-chairman & CEO, HDFC, on an analyst call.
 
The board of directors recommended a dividend of Rs 23 per equity share of Rs 2 each. The board of HDFC has approved the re-appointment of Keki Mistry as the vice-chairman and CEO of HDFC for a period of another three years. However, the re-appointment is subject to shareholders' approval in the annual general meeting of the lender that is scheduled on July 20, 2021.