HDFC gains after strong quarterly performance

HDFC rose 2.62% to Rs 2458.65 after the corporation announced Q3 earnings after market hours on Monday, 27 January 2020.

The housing finance major's standalone net profit surged 296.1% to Rs 8,372.49 crore in Q3 December 2019 from Rs 2113.80 crore in Q3 December 2018.

The reported profit before tax for the quarter ended on 31 December 2019 stood at Rs 9142.99 crore, up by 218.7% from Rs 2,869 crore in the corresponding quarter of the previous year.

GRUH Finance (GRUH), an associate of HDFC, merged into and with Bandhan Bank with effect from 17 October 2019. HDFC was allotted 15.93 crore or 9.90% equity of Bandhan Bank. Accordingly, HDFC has recognized a fair value gain of Rs 9,019.81 crore in Q3 December 2019.

Tax expenses for the December quarter rose 2.05% to Rs 770.50 crore from Rs 755 crore in Q3 December 2018.

Total income of HDFC surged 91.7% to Rs 20291.45 crore in Q3 December 2019 from Rs 10582.49 crore in Q3 December 2018.

Net interest income (NII) rose 9% to Rs 3,239.92 crore in Q3 December 2019 from Rs 2,983.89 crore in Q3 December 2018. Net interest margin stood at 3.3% as on 31 December 2019 as compared to 3.4% as on 31 December 2018.

The gross non-performing loans as at 31 December 2019 stood at Rs 5,950 crore. This is equivalent to 1.36% of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.75% while that of the non-individual portfolio stood at 2.91%.

Assets Under Management (AUM) rose 13.59% to Rs 505,401 crore as on 31 December 2019 as compared to Rs 444,923 as on 31 December 2018.

As at 31 December 2019, the loan book stood at Rs 4,41,472 crore as against Rs 3,89,421 crore in the previous year, representing a growth of 13%. Individual loans comprise 76% of AUM.

The Corporation's capital adequacy ratio stood at 18.6%, of which Tier I capital was 17.3% and Tier II capital was 1.3%. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 13% and 10% respectively.

HDFC's consolidated net profit rose 26.23% to Rs 3,835.38 crore on 21.60% increase in total income to Rs 30,724.93 crore in Q3 December 2019 over Q3 December 2018. Consolidated PBT rose 6.47% to Rs 4,600.79 crore year-on-year (Y-o-Y). Tax expense fell 15.55% to Rs 873.52 crore during the period under review.

Further, HDFC's board approved issuance of secured redeemable non-convertible debentures under a shelf disclosure document (Series - X), aggregating Rs 45,000 crore, in various tranches, on a private placement basis.

Housing Development Finance Corporation is engaged in financing by way of loans for the purchase or construction of residential houses, commercial real estate and certain other purposes, in India.

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