HDFC slips after Q1 PAT falls 5%

The housing finance major fell 1.50% to Rs 1851.10 after net profit fell 4.7% to Rs 3051.52 crore in Q1 June 2020 from Rs 3203.10 crore in Q1 June 2019.

Total income rose marginally by 0.2% on a year-on-year basis (YoY) to Rs 13,019.29 crore during the period under review.

Net interest income (NII) rose 10% to Rs 3392 crore in Q1 June 2020 from Rs 3079 crore in Q1 June 2019. The NII numbers, however, are not comparable with each other owing to the higher liquidity levels and equity investments made in the recent period. Net interest margin (NIM) stood at 3.1% as on 30 June 2020 as compared to 3.3% as on 30 June 2019.

Total tax expense fell 29% YoY to Rs 555.31 crore in the June quarter. Profit before tax in Q1 FY21 stood at Rs 3606.83 crore, down by 9.5% from Rs 3985.11 crore in Q1 FY20.

After adjusting dividend, profit on sale of investments, net gains on de-recognition of assigned loans, provisioning and the impact of negative carry on account of higher liquidity, the adjusted profit before tax for the quarter ended 30 June 2020 is Rs 3,265 crore compared to Rs 2,684 crore in the previous year, reflecting a growth of 22%.

As per National Housing Bank norms, the gross non-performing loans as at 30 June 2020 stood at Rs 8,631 crore (as compared to Rs 8,908 crore as at 31 March 2020). This is equivalent to 1.87% of the loan portfolio (1.99% as at 31 March 2020). The non-performing loans of the individual portfolio stood at 0.92% while that of the non-individual portfolio stood at 4.10%. The provisions as at 30 June 2020 stood at Rs 12,285 crore.

HDFC's expected credit loss charged to the statement of profit and loss stood at Rs 1,199 crore in Q1 FY20 as against Rs 890 crore in Q1 FY20. This includes a COVID-19 provision of Rs 404 crore made during the quarter.

Individual loans under moratorium 1 accounted for 22.6% of the individual loan portfolio. 27.0% of the corporation's total loans under management were under moratorium 1. On 23 May 2020, the RBI further permitted an extension of the moratorium period by 3 months from 1 June 2020 up to 31 August 2020 (moratorium 2). As of date, individual loans under moratorium 2 accounted for 16.6% of the individual loan portfolio. 22.4% of HDFC's total loans under management have opted for moratorium 2.

All investments in HDFC's subsidiary and associate companies are carried at cost and not at fair value. Accordingly, as at 30 June 2020, the unaccounted gains on listed investments in subsidiary and associate companies amounted to Rs 1,92,151 crore.

For the quarter ended 30 June 2020, the consolidated profit after tax stood at Rs 4,059 crore as compared to Rs 3,540 crore in the previous year, representing a growth of 15%.

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