Mortgage lender HDFC on Tuesday reported a 65 per cent year-on-year (YoY) decline in standalone net profit to Rs 2,925.83 crore for the quarter ended December 2020 (Q3FY21) on the back of lower income. The housing financier's PAT stood at Rs 8,372 in the year-ago period (Q3FY20).
Sequentially, the profit grew 2 per cent from Rs 2,870 crore clocked in Q2FY21.
The numbers were largely in-line with Street expectations. Analysts at global brokerage Nomura, for instance, had pegged the net profit at Rs 2,742 crore for the quarter, while those at domestic brokerage Emkay Global estimated it at Rs 2,325.4 crore.
Its consolidated net profit, attributable to the owners, however, came in at Rs 5,176.76 crore for the quarter under review, clocking an improvement of 35 per cent on year, from Rs 3,835.38 crore reported in Q3FY20.
The HDFC group firm’s pre-tax profit came in at Rs 3,752.54 crore, down 58.95 per cent YoY, from Rs 9,143 crore, while it increased 6.2 per cent QoQ from Rs 3,532 crore.
HDFC, however, said the profit for the quarter ended December 31, 2020 should not be directly compared with that of the previous year as it included profit on sale of part stake in HDFC Life and dividend (worth Rs 159 crore); net gain on fair value changes and income on loans assigned (worth Rs 641 crore); and charge for employee stock options (worth Rs 147 crore).
"To facilitate a like-for-like comparison, after adjusting for the above, the adjusted profit before tax for the quarter ended December 31, 2020 is Rs 3,694 crore compared to Rs 2,908 crore in the previous year, reflecting a growth of 27," it said in a statement.
Revenue from the operations came in at Rs 11,707 crore for the quarter under review, as compared to Rs 20,285.47 crore in the corresponding quarter of the previous fiscal. This included Rs 157 crore income via sale on investments, and an income from derecognised/assigned loans worth Rs 410.28 crore.
It's expenses declined sharply to Rs 7,963.8 crore, compard with Rs 11,148.46 crore incurred in the year-ago period.
The NBFC's net interest income (NII) increased 23.4 per cent YoY to Rs 4,068 crore for Q3 of Fy21, up from Rs 3,296.7 crore reported in Q3FY20.
The spread on loans over the cost of borrowings for the nine months ended December 31, 2020 was 2.28 per cent. The spread on the individual loan book, on the other hand, was 1.94 per cent and on the non-individual book was 3.14 per cent. Overall, the net interest margin (NIM) for the nine months ended December 31, 2020 stood at 3.4 per cent.
HDFC said overall collection efficiency ratios for individual loans have improved, nearing pre-Covid levels. The collection efficiency for individual loans in the month of December 2020 stood at 97.6 per cent compared to 96.3 per cent in the month of September 2020.
The gross non-performing loans as at December 31, 2020 stood at Rs 8,012 crore, translating to gross NPA ratio of 1.67 per cent. down from 1.81 per cent at the end of the September quarter. The non-performing loans of the individual portfolio stood at 0.79 per cent while that of the non-individual portfolio stood at 4 per cent. The quarter also saw resolutions in certain non-individual loans, HDFC said.
"If the Supreme Court order of maintaining the classification of accounts as status quo till further orders were not to be considered, the non-performing loans would have been higher at 1.91 per cent of the loan portfolio; with individual NPLs at 0.98 per cent and non-individuals NPLs at 4.35 per cent," it added.
That apart, HDFC carried provisions worth Rs 12,342 crore at the end of the December quarter, as against required (as per regulatory norms) limit of Rs 6,579 crore. The provisions carried, as a percentage of the Exposure at Default (EAD), is equivalent to 2.56 per cent.
Overall Lending Operations
The average size of individual loans disbursed during the nine months ended December 31, 2020 stood at Rs 28.5 lakh. The average loan size for the quarter ended December 31, 2020 was higher at Rs 30 lakh.
As at December 31, 2020, the loans on an assets under management (AUM) basis stood at Rs 5,52,167 crore as against Rs 5,05,401 crore in the previous year. As at December 31, 2020, individual loans comprise 76 per cent of the Assets Under Management (AUM).
As at December 31, 2020, the individual loan book on an AUM basis grew 10 per cent and the non-individual loan book grew by 7 per cent. The growth in the total AUM was 9 per cent."
"During the quarter ended December 31, 2020, the Corporation assigned loans amounting to Rs 7,076 crore to HDFC Bank compared to Rs 4,258 crore in the corresponding quarter of the previous year. Loans sold in the preceding 12 months amounted to Rs 16,956 crore. As at December 31, 2020, the outstanding amount in respect of individual loans sold was
Rs 68,073 crore. HDFC continues to service these loans," it said in a statement.
Shares of the NBFC were quoting at Rs 2,727 apiece, up 5.6 per cent, on the BSE at 2:35 PM, as against a 2.65 per cent-rise in the S&P BSE Sensex. The stock hit an intra-day high of Rs 2,762 on the BSE.