Low investment gains, squeeze on NIM hurt HDFC's profit growth

Mortgage major HDFC's consolidated net profit in the December quarter rose 13.42 per cent to Rs 1,934.85 crore as an uptick in core interest income was partly offset by lower gains from the sale of investments.
Vice Chairman and Chief Executive Officer Keki Mistry said bottom line growth was pulled down by lower profit from the sale of investments. If not for this dip, profit growth would have been 17 per cent, he added.
The city-headquartered lender said core net interest income increased 17 per cent to Rs 1,905 crore, while other income rose to Rs 12.12 crore from Rs 10.79 crore a year ago.

Total income climbed to Rs 10,052.98 crore during the third quarter from Rs 8,873.25 crore a year ago, and income from operations rose to Rs 6,344 crore from Rs 5,538 crore.
HDFC registered a loan book growth of 19 per cent for the quarter, while for the nine-month period, loans to individuals accounted for 89 per cent of incremental loans, resulting in a 70 per cent share for retail in the overall book.
Dividend and profit on the sale of investments was Rs 110.93 crore as against Rs 141.50 crore in the year-ago period. On a standalone basis, profit from the sale of investments dropped to Rs 34.62 crore from Rs 96.32 crore.

Unrealised gains on the company's listed investments amounted to Rs 33,379 crore.

Brokerages said the results were in line with estimates. HDFC shares gained 0.59 per cent to Rs 842.25 at the close on the BSE, while the 30-share benchmark Sensex gained 0.41 per cent to a record closing level.
Rikesh Parikh of Motilal Oswal Securities said the numbers are in line with his estimates. He said the lender's asset quality has remained healthy over the past several quarters and the trend is likely to continue.
On a standalone basis, HDFC's net profit grew 12 per cent to Rs 1,277.71 crore. Total income rose to Rs 6,019.80 crore from Rs 5,250.40 crore a year earlier.