Housing financier HDFC on Thursday reported a standalone net profit of Rs 3,051.52 crore for June quarter of FY21 (Q1FY21), clocking a 4.7 per cent year-on-year (YoY) de-growth from Rs 3,203.1 crore-profit reported in Q1FY20. Sequentially, the profit grew 36.68 per cent from Rs 2,232.5 crore reported in the March quarter of FY20.
“During the quarter, the corporation sold 26 million equity shares of HDFC Life, resulting in a pre-tax gain of Rs 1,241.20 crore” said the management in a statement. The profit from sale of investments was Rs 2.45 crore in the March quarter of FY20.
The non-bank finance company’s (NBFC) revenue from operations stood at Rs 13,017.68 crore for the quarter under review compared Rs 12,990.29 crore earned in the previous year quarter. In Q4FY20, the same was Rs 11,975.72 crore, which translates into a 8.7 per cent sequential growth.
Including other income, the total income came in at Rs 13,019.29 crore, up just 0.01 per cent from Rs 12,996.11 crore reported in Q1FY20.
"In view of uncertai environment on liquidity, created due to Covid-19, the coporation has been carrying higher levels of investment in liquid mutual funds since the announcement of the lockdown. The amount invested in such mutual funds as at June 30, 2020 was Rs 30,820 crore. This is significantly higher than the amont invested in previous-year quarter," the management said in a statement.
NII and NIM
The net interest income (NII) for the quarter under review jumped 10 per cent year-on-year (YoY) to Rs 3,392 crore, up from Rs 3,079 crore reported in the corresponding quarter of the previous fiscal. After adjusting for Covid-19, the NII for the quarter was Rs 3,609 crore, it said.
It's net interest margin (NIM) slipped marginally to 3.1 per cent from 3.3 per cent YoY.
Analysts at Emkay Global Financial Services had pegged the NII at Rs 5,002.5 crore, while those at Prabhudas Lilladher had estimated the same at Rs 2,793.8 crore.
HDFC’s Board approved to raise funds up to Rs 45,000 crore through issuance of secured redeemable, non-convertible debentures on private placement basis.
Loan book and moratorium
The average size of individual loans stood at Rs 24.6 lakh, as against average loans of Rs 27 lakh in the year-ago period. Lower average loans, the NBFC said, was largely on account of the fact that major tier-1 cities were under lockdown.
As of June 30, 2020, the assets under management (AUM) stood at Rs 5.31 trillion, up from Rs 4.76 trillion-worth of AUMs in the corresponding quarter of the previous fiscal. Of these, individual loans comprised of 74 per cent of the AUM, it said.
Analysts at ICICI Securities had expected mildly lower AUMs for the quarter at Rs 5.11 trillion.
It said individual loans under moratorium 2 declined to 16.6 per cent from 22.6 per cent in moratorium 1, while total loans under moratorium 2 were at 22.4 per cent, compared to 27 per cent in moratorium 1.
Asset quality and provisioning
According to the NBFC's financil statements, the gross NPA as at June 30 stood at Rs 8,631 crore, down 3.1 per cent QoQ, from Rs 8,908 crore reported as on March 31, 2020. This is equivalent to 1.87 per cent of the loan portfolio.
The NPA is percentage terms, for individual and non-individual borrowers, was 0.92 per cent and 4.1 per cent, respectively.
As regards provisioning, the contigent amount stood at Rs 12,285 crore at the end of the June quarter. "The corporation's expected credit loss, charged to the Profit and Loss account, stands at Rs 1,199 crore. Of this, Covid-19 related provisions stand at Rs 404 crore made during the quarter," it said.
The stock declined sharply after the result announcement. The stock ended was trading 3.64 per cent lower at Rs 1,811 apiece on the BSE as against 335 points, or 0.88 per cent, decline in the S&P BSE Sensex at 37,736 level. The stock touched an intra-day high and low of Rs 1,900 and Rs 1,807, respectively.