HDFC Q1 net profit jumps 53.7%: Surge in NPA ratio not worrisome

HDFC reported good operational performance for Q1, with assets under management growing 18 per cent year-on-year

Housing Development Financial Corporation (HDFC)’s June quarter (Q1) results, at first glance, may startle investors given the surge in its non-performing assets (NPA or bad loan) ratio.

But, as analysts say, it is due to change in accounting. Nevertheless, its provisioning coverage ratio (PCR), too, is at comforting levels and operating performance remains healthy. Thus, most analysts remain positive on the stock, and see any correction as an entry opportunity.

To start with, HDFC reported good operational performance for Q1, with assets under management (AUM; loan book) growing 18 per cent year-on-year, and net interest income (NII) and net profit