HDFC Q4 net profit tumbles 22% to Rs 2233 cr

The housing finance major's standalone net profit declined 22% to Rs 2232.53 on 3.41% rise in total income to Rs 11,981.66 crore in Q4 March 2020 over Q4 March 2019.

Profit before tax (PBT) for the quarter stood at Rs 2692.44 crore, down by 27% from Rs 3690.89 crore in the corresponding quarter of the previous year. Current tax expense for the March quarter declined 42.20% to Rs 541.66 crore in Q4 March 2020 from Rs 937.11 crore in Q4 March 2019.

Dividend income slumped to Rs 2.08 crore in Q4 FY20 from Rs 536.88 crore in Q4 FY19. With dividend distribution tax being abolished, some of the subsidiary company did not pay interim dividend," the firm said.

Profit on sale of investment was Rs 2 crore in Q4 FY20 as against Rs 321 crore in Q4 FY19. Fair value changes charged to the statement of profit and loss - largely on account of the fall in the stock markets, was Rs 428 crore in Q4 FY20, higher than Rs 167 crore in the previous year.

Increase in provisioning, including impact for COVID-19, was Rs 1,274 crore in Q4 FY20, higher than Rs 398 crore in the previous year.

After adjusting for fair value adjustments, profit on sale of investment, dividend and provisioning, the adjusted profit before tax for the quarter ended 31 March 2020 is Rs 3,535 crore compared to Rs 3,064 crore in the previous year, reflecting a growth of 15%.

Inclusive of fees and income from assigned loans, the Net Interest Income (NII) for the quarter ended 31 March 2020 stood at Rs 3,780 crore compared to Rs 3,238 crore in the previous year, representing a growth of 17%.

The board of HDFC approved a dividend of Rs 21 per share for the year ended March 2020.

Total individual loan approvals grew by 14% in volume terms and 12% in value terms. Disbursements grew by 7%. The average size of individual loans stood at Rs 27 lakh. As at 31 March 2020, the loan book stood at Rs 4,50,903 crore as against Rs 4,06,607 crore in the previous year, representing a growth of 11%.

On the asset quality front, the gross non-performing loans as at 31 March 2020 stood at Rs 8,908 crore. This is equivalent to 1.99% of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.95% while that of the non-individual portfolio stood at 4.71%. The corporation's capital adequacy ratio stood at 17.7%, of which Tier I capital was 16.6% and Tier II capital was 1.1%.

HDFC said the impact of COVID-19 was felt towards the last fortnight of the financial year. Retail loan disbursements were disrupted in the latter half of the month of March. 97% of the corporation's customers use electronic modes of repayment for their installments. However, in respect of 3% of borrowers, where follow ups would have otherwise been done through personal visits, this was not possible owing to the national lockdown. Recovery efforts were hampered in the latter half of March 2020, which resulted in an increase in individual non-performing loans.

The corporation has adopted an 'opt-in' structure for the moratorium. As of date, approximately 26% of the Corporation's loans under management have opted for the moratorium. Individual loans under moratorium account for 21% of the individual loan portfolio.

As of date, nearly 90% of HDFC's offices are open for business. Shares of HDFC fell 5% to Rs 1516.55 on Friday.

Housing Development Finance Corporation (HDFC) 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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