HDFC Ltd's Sept qtr net up 32% to Rs 3,780 cr on spike in dividend income

The lender's revenue from operations rose 4% YoY to Rs 12,216 crore in the reporting quarter while NII was up 13% to Rs 4,109 crore in Q2

The country’s largest mortgage financier, HDFC Ltd, reported a 32 per cent year-on-year (YoY) rise in net profit in the July-September quarter (Q2FY22), aided by sharp rise in dividend income. The lender’s net profit for the period stood at Rs 3,780 crore, compared to Rs 2,870 crore in the year-ago period, and beat street estimates as well.

The lender's revenue from operations rose 4 per cent YoY to Rs 12,216 crore in the reporting quarter while its net interest income was up 13 per cent YoY to Rs 4,109 crore in Q2 from Rs 3,646.5 crore a year ago.

HDFC Ltd made provisions of Rs 13,340 crore in the September quarter as against the regulatory requirement of Rs 6,605 crore. The provisions carried as a percentage of the Exposure at Default (EAD) is equivalent to 2.56 per cent.

Asset quality improved sequentially, particularly in respect of individual loans. Gross non-performing assets (GNPAs) improved by 24 basis points (bps) to 2 per cent at the end of Q2, from o 2.24 per cent in Q1. Individual gross NPA declined to 1.1 per cent from 1.37 per cent and non-individual gross NPA fell to 4.69 per cent from 4.87 per cent sequentially. Collection efficiency for individual loans on a cumulative basis improved to 98 per cent during the quarter.

The aggregate amount of loans for which restructuring has been implemented constitute 1.4 per cent of the loan book, the management said. Out of which, 63 per cent are individual loans and 37 per cent are non-individual loans.  

“Business during Q1 was partially disrupted due to the second wave, particularly in the later part of April and in May. There has been a sharp recovery in business from June onwards. This momentum has continued through Q2”, said Keki Mistry, CEO & Vice – Chairman, HDFC Ltd.

During the half-year ended September 30, 2021, individual approvals and disbursements grew by 67 per cent and 80 per cent, respectively compared to the corresponding period in the previous year. Individual loan disbursements in Q2 were 48 per cent higher than Q1 and 44 per cent higher than the year-ago period, said Mistry.

“The demand for home loans continues to remain strong. Growth in home loans was seen in both the affordable housing segment as well as in high end properties. Individual disbursements in the month of October 21 were the highest ever in a non-quarterly end month”, he added.

The individual loan book of the lender grew by 16 per cent on an asset under management (AUM) basis and the total loan book grew by 11 per cent. In Q2, loans worth Rs 7,132 crore were assigned to HDFC Bank.

The non-individual portfolio of the lender has seen a pick-up in Q2, driven significantly by the lease rental discounting component, the management said in an analyst call. “Although we continue to report a de-growth as compared to the previous year, we have seen a healthy growth during Q2. We presently have a good pipe line and we expect to see a positive growth for the whole year”, Mistry said. As of September quarter, the non-individual loan book of the corporation stood at Rs 1.29 trillion.

The AUM of the lender increased by 10.6 per cent to Rs 5.97 trillion at the end of September quarter as against Rs 5.4 trillion in the year-ago period.